What are the key issues determining the success of GFANZ?

Are fossil fuels the right focus? What about the 1.5°C goal? And how should we deal with negative emissions technologies?

Climate target-setting frameworks in financial markets are at an inflection point.

The past 5 years have seen a plethora of initiatives around portfolio climate targets, starting with the Portfolio Decarbonization Coalition and culminating in the Glasgow Financial Sector Alliance for Net Zero (GFANZ). It appears that these frameworks face a sort of endgame in the sense that we are unlikely to see new initiatives in the course of this decade (at least on climate) and the key focus will be on implementation. At the same time, the anti-ESG backlash in the United States represents what some consider an existential threat to these initiatives.

As part of a new series exploring the “make or break” moments in sustainable finance, Theia Finance Labs has identified the 7 key issues determining whether GFANZ makes it or breaks and a potential way forward. The note explores key questions around whether to shift focus away from fossil fuels, the viability of the 1.5°C target, and the need to finance negative emissions technologies, among others.

We recognize that many of these issues are highly controversial and sometimes emotional. We also appreciate that some of the responses to these issues are not “technical” but involve weighing different political pros and cons. Our “make or break series” distinguishes itself from our traditional work by providing perspectives on these issues in the recognition that there may not be a right or wrong answer.

We welcome thoughts & criticisms. Tell us what you think by sending us an email at