GFANZ Will Restructure and Shift Its Focus to Addressing Barriers to Mobilizing Capital

Since its launch at COP26, GFANZ has achieved its initial goal of developing the building blocks of a financial system capable of financing the transition to net zero. To successfully transition the economy, we must accelerate progress in public policy and technology developments, and close three critical gaps: data, action, and investment.

To close the data gap, the International Sustainability Standards Board (ISSB) created a global climate reporting standard building on the work of the Task Force on Climate-related Financial Disclosures (TCFD). More than 30 jurisdictions – representing over 55% of global GDP – have already announced steps to implement or align with ISSB standards.

To close the action gap, GFANZ developed a voluntary transition plan framework to help enable the flow of capital to where the emissions are, informed by the Financial Stability Board (FSB) and the G20 Sustainable Finance Working Group (SFWG). More than 500 major financial institutions representing over $100 trillion in balance sheets have now voluntarily developed independent transition plans using the GFANZ framework. Major economies, including Australia, China, the European Union, Japan, Singapore, South Africa, and the UK, have also introduced or are considering transition planning guidance consistent with the GFANZ framework.

With these building blocks in place, GFANZ will turn its focus to closing the investment gap to help unlock the more than $5 trillion a year opportunity created by countries modernizing their energy systems and putting economies onto a low-carbon path in the next decade. This will help strengthen growth, create jobs globally, and help mobilize the capital needed for the transition, especially in emerging markets and developing countries (EMDCs).

GFANZ will transition to an independent Principals Group, led by CEOs and leaders from financial institutions acting to address barriers faced in mobilizing capital for the transition around the world – including sovereign wealth funds, financial institutions, and market participants in countries with longer transition pathways.

GFANZ will concentrate on mobilizing finance through public-private partnerships such as country platforms and Just Energy Transition Partnerships (JETPs) – including Brazil, Indonesia, and Vietnam – to ensure they bring private finance to the table alongside governments, multilateral development banks (MDBs), and other development partners. GFANZ will also continue to work with MDBs to develop and scale new tools to mobilize private finance at scale, including through the World Bank Private Sector Investment Lab. Additionally, GFANZ will build on its work to support the Industrial Transition Accelerator and the scaling of high-integrity voluntary carbon markets by engaging with governments and regulators to help remove regulatory barriers to private sector investment and develop enabling policy environments.

Overcoming barriers to mobilizing capital at the scale and speed required to achieve net zero is urgent and achievable. GFANZ is steadfast in its commitment to supporting financial institutions worldwide in addressing these challenges and seizing the opportunities of this pivotal moment.