January 9, 2025 - A fundamental shift is happening, and it’s one that should concern us all. As described in a FD Article ‘Green Ambitions and Trump's Influence’, the world’s largest coalition of green financial institutions, the Glasgow Financial Alliance for Net Zero (GFANZ), is quietly scaling back its climate ambitions. What was once a high-commitment initiative focused on reducing financed CO₂ emissions to net-zero by 2050 is now moving away from this ambitious goal. The new focus? Simply financing green projects, without the critical push to actively reduce emissions or hold businesses accountable for their environmental impact. This troubling change is largely driven by the impending political landscape shift, with Donald Trump’s return to power putting a serious dent in green financial initiatives.

The GFANZ was initially launched as a beacon of hope in the fight against climate change, bringing together hundreds of banks, insurers and asset managers committed to transforming the financial system to support a sustainable future. At its peak, nearly 700 institutions, including almost 150 major banks, were involved. Members were required to be transparent about their portfolios’ emissions and actively reduce them by financing fewer fossil fuel projects and shifting toward greener alternatives. These strict guidelines helped cement the coalition’s credibility as a leader in the global push for sustainability.

However, the shifting political winds in the United States, coupled with Trump’s vocal opposition to green initiatives, have led the coalition to abandon many of its core commitments. As Trump’s political influence grows, several major U.S. banks have already withdrawn from the alliance, fearing political retaliation or regulatory challenges. In a recent statement, the coalition acknowledged that the alliance's focus had shifted from reducing emissions to simply "mobilizing capital" for green projects, a far less ambitious goal. No longer will financial institutions be required to meet the rigorous targets they once committed to. Instead of demanding real progress, it now opens the doors to any institution that can fund green initiatives, regardless of their actual impact on emissions reduction. This change significantly dilutes the original purpose and effectiveness of the coalition.

The effects of this shift cannot be underestimated. What started as a coalition with bold, transformative goals is now at risk of becoming an empty symbol. The commitment to achieving net-zero emissions by 2050 is being sidelined, as the focus narrows to financing green initiatives without holding anyone accountable for effectively reducing their harmful environmental impact. This is especially troubling as we look ahead to the future. Can we afford to lose the momentum we’ve gained in the battle for climate sustainability simply because of political pressures? The implications for the green transition are huge, as this change could set a dangerous precedent for other financial institutions and governments to follow suit.

Standing firm amidst uncertainty

It’s becoming increasingly clear that the green transition, which we’ve worked so hard to build, is at risk of being derailed. The progress we’ve made - the financial commitments, the global momentum - could easily unravel if we let political agendas dictate the future of climate action. The question we must ask ourselves now is: will we allow a single individual’s political ideology to undo decades of progress in creating a sustainable future for our planet? Will we let climate action become just another casualty of politics, or will we choose to stand firm, even when the odds are stacked against us?