The Politics of Participation in the Glasgow Financial Alliance for Net Zero

• In Event: Political Economy of Climate Change

Abstract

Since its launch in 2021 the Glasgow Financial Alliance for Net Zero (GFANZ) has grown to include over 500 member firms, among them some of the world’s largest banks, asset managers, insurers, and financial service providers. Despite the launch of new regional initiatives in Africa and Asia, the membership of GFANZ remains predominantly European. In the real economy, concerns about international competitiveness have motivated some of the loudest private sector critics of European decarbonization policy. Yet financial firms have voluntarily committed to socially motivated targets which remain largely unreciprocated by international competitors. This paper argues that financial firm membership in GFANZ is driven by a combination of reputational concerns and the anticipation of future regulatory changes. I test these arguments using quantitative text analysis of publicly available statements and communications of GFANZ member firms. Semi-structured interviews with representatives of member firms provide further insight into the motivations behind voluntary participation. Both analyses provide consistent support for the argument.

Author

• Amanda Kennard, Stanford University