UN joins faith-based initiative for shift towards climate-responsible finance

The World Council of Churches (WCC), UNEP, Muslim Council of Elders, and NY Board of Rabbis have all signed the Climate-Responsible Finance – A moral imperative and responsibility to all children and the living world.

“We, leaders of the undersigned organizations, affirm our commitment to engaging with the financial institutions through which we bank, invest, and seek insurance coverage, to ensure that our financial dealings are aligned with the Paris Agreement objective of limiting global warming to 1.5° C,” it reads.

The signatories also agreed to review their “pension, banking, insurance and other financial service arrangements to ensure evidence-based accountability”.

Welcome move

Secretary-General António Guterres welcomed the initiative, saying that “for too long, the financial services sector has enabled the world’s fossil fuel addiction”.

“It is now time for financial service providers to accelerate the shift to renewables. They have the power – and the responsibility”.

The findings of the latest Intergovernmental Panel on Climate Change (IPCC) report, released on 4 April, dramatize the critical urgency of this challenge.

Meeting net-zero

The initiative suggests positioning investment portfolios in ways that will help to meet net-zero GHG emissions by 2050.

In addition to investing in renewable energies and researching for climate solutions, it pushes for the European Union and the Organization for Economic Co-operation and Development to fully phase-out financial services and exposure to coal no later than 2030, and no later than 2040 for the rest of the world.

It also advocates to end all financing towards any new oil and gas projects exploration and extraction projects and requires oil and gas companies to stop all new development or expansion projects beyond this year.

Against this backdrop, the joint appeal calls upon financial service providers to take urgent and effective action to transition out of fossil fuel financing and invest in climate solutions through renewable energies and research.

“The scientific and moral imperative is clear: There must be no new investment in fossil fuel expansion, including production, infrastructure and exploration,” spelled out the UN chief.

Financial providers call

The appeal also calls on financial service providers to require “oil and gas companies to stop all new development or expansion projects…including especially all such projects in the Arctic region,” and, if they are not already party, to join the UN-convened Net Zero Asset Owner, Banking and/or Insurance Alliances, depending on the type of financial institution concerned.

The text concludes by inviting “all members of our constituencies and all our partners to do likewise, so that together we may move beyond words to effective action, and be the change for which we call."

Stem climate threat

The top UN official underscored that from mining to power generation, this year all private financiers need to “stop funding the entire coal sector…and actively shift finance to renewables”.

You should use “Secretary-General” or “Mr. Guterres” here since the preceding paras quote the appeal, not him.

Meanwhile, in launching the appeal, WCC’s acting chief urged everyone to “come together and influence how money is invested in response to the existential threat of climate change”.

“Family money, church money, a company’s money, a nation’s money,” said Ioan Sauca. “We need everyone to take this step for a sustainable future for our children.

The Secretary-General concluded by lauding “this important faith-based nitiative”, saying that “people, communities and organizations of faith have the influence needed to affect this transition”.