Carney defends dropping U.N. climate initiative over antitrust concerns
Mark Carney #MarkCarney
By Simon Jessop
LONDON (Reuters) – Mark Carney, co-chair of a group of financial firms that has pledged to tackle climate change, told Reuters its members were allowed to drop out of a United Nations initiative that mandates the phasing out of fossil fuels because of antitrust concerns.
Carney’s Glasgow Financial Alliance for Net Zero (GFANZ), whose members include more than 550 financial firms with a combined $150 trillion of assets, said last week it would no longer require adherence to Race to Zero, a U.N. initiative which requires signatories to phase out fossil fuels.
Carney, who is also a U.N. special climate envoy, said GFANZ members raised concerns about legal liabilities, particularly around antitrust law, if his coalition continued to require adherence to Race to Zero.
“Under antitrust rules, if you band together and decide you will all do one thing or you all won’t do one thing, like decide that is the hard rule, then you have a potential problem,” Carney said in an interview.
It is unclear how well founded the fears over antitrust risk are. There has been no major climate-related litigation on antitrust grounds thus far, but a limited number of regulators and officials, such as Mark Brnovich, the attorney general of Arizona, have said they are exploring it.
Carney’s comments come on the eve of the COP27 climate summit in Egypt, where countries are facing accusations they have been distracted from their pledges because of Russia’s invasion of Ukraine, which caused an energy crunch and strengthened demand for fossil fuels.
Many of Carney’s GFANZ members, including banks and asset managers, also face a political backlash in parts of the United States over what some Republican politicians sceptical about climate action call “woke capitalism”.
GFANZ members have committed to bringing their carbon emissions down to net zero by 2050 at the latest and “delivering their fair share” of 50% emission reductions this decade.
Carney said GFANZ would be “informed by, not dictated to, by Race to Zero or anyone else”.
He cited the example of power producer AGL in Australia, which faced a bid from billionaire climate activist Mike Cannon Brooks and Carney’s employer, asset manager Brookfield, attempting to shut down coal usage by 2030 instead of the company’s 2045 target.
“If we had a ‘no-add coal’ (rule), then you couldn’t do it. And these guys would sit and run it until 2045. How’s that make sense?”
The greater focus, Carney said, should be on the financial firms that have yet to join GFANZ.
“There is 40% of the global financial system that’s in GFANZ, how about a little scrutiny on the 60% that isn’t, right?”
(Reporting by Simon Jessop in London; Editing by Greg Roumeliotis and Mark Potter)