A global coalition of 60 climate and rights groups, led by Rainforest Action Network (RAN) and including Friends of the Earth, Greenpeace, the Sierra Club and Urgewald, has issued a set of principles for finance companies attempting to truly align the climate impact of their business practices with the Paris Agreement in the run up to COP26.

The Principles for Paris-Aligned Financial Institutions: Climate Impact, Fossil Fuels and Deforestation offers a roadmap for the decarbonisation of the finance sector on a timetable aligned with the Paris Agreement.

“The principles explain that to be taken seriously, financiers need both long-term plans that zero out their climate pollution, as well as immediate steps to stop financing the expansion of fossil fuels and deforestation,” said Paddy McCully, climate and energy director with Rainforest Action Network. “We need an immediate halt to lending, investing and insurance for new coal, oil and gas projects, and the companies that are building these projects. We also need an end to finance for the companies that are causing and encouraging the degradation of forests and other ecosystems.”

The groups say that ‘Paris Alignment’ for financial institutions has to mean aligning financing, investing and financial services such as insurance with the reductions in pollution that will keep climate change to the Paris temperature cap of 1.5C. The guidance includes a demand that rights must also be respected when taking action to address climate change, and a just transition must be secured for workers and communities currently dependent upon economic activities that will need to be rapidly phased out.

The organisations that have endorsed the principles are committed to work together to increase the pressure on banks and other financial institutions to adopt them in the build up to COP26 in Glasgow.

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