Essay by Eric Worrall
Members are ditching Bank of England Governor Mark Carney’s Net Zero Asset Alliance, amidst claims of greenwashing and fears of legal exposure.
Pension fund Cbus quits Mark Carney’s green alliance
Alastair MarshSep 26, 2022 – 9.38am
London Pension fund Cbus and Austrian pensions firm Bundespensionskasse have become the first institutions to leave a financial alliance on tackling climate change spearheaded by former Bank Of England governor Mark Carney.
Australia’s Cbus left the Net Zero Asset Owner Alliance recently to focus on “internal climate change activities”, while Bundespensionskasse exited the Paris Aligned Asset Owners group last month. The coalitions form part of the Glasgow Financial Alliance for Net Zero (GFANZ) launched with much fanfare last year.
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Investors are increasingly impatient with evidence of potential “greenwashing” amid signs net-zero pledges made by some members of the financial industry are not credible, said former US vice president Al Gore.
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For some members, there’s a growing realisation that they may fail to meet the goals set out by the alliance, while others have expressed fear the organisation’s strict requirements for decarbonisation could make them legally vulnerable.
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The fear of legal vulnerability is likely the real obstacle to progress of Carney’s Net Zero group. Investment managers have a fiduciary duty to protect the value of client’s investments, and Prime Minister Liz Truss’ open support for fracking has massively increased the risk for green investors.
The legal liability fear might also be a hangover of former HSBC Responsible Banking Head Stuart Kirk’s reveal all speech earlier this year, in which Kirk appeared to suggest Mark Carney was pressuring bankers like himself to use exaggerated model assumptions to pump the value of climate investments. I’m not accusing Carney of doing this, I may have misunderstood Kirk’s point, but deliberately manipulating models to present a false impression of value is a serious crime.
Former HSBC Head of Responsible Banking telling investors not to worry about climate change
