Q&A with Heather Buchanan, Chief Executive Officer of Bankers for Net Zero
| Heather, while many are familiar with the Net Zero Banking Alliance (NZBA), Bankers for Net Zero (B4NZ) might sound similar to our readers who aren’t yet familiar with your initiative. Could you please explain what it’s about and clarify the differences between both?
Bankers for NetZero (B4NZ) was launched as an initiative in 2019 to enable conversations between banks, regulators and the Government in the lead-up to COP26.
COP26 faced a delay, during which we actively participated in establishing the Glasgow Financial Alliance for Net Zero (GFANZ) and the Net-Zero Banking Alliance (NZBA). In a significant development, B4NZ was introduced as the first UN-convened country chapter, representing the United Kingdom. Consequently, B4NZ holds a position within the framework of both GFANZ and NZBA.
GFANZ was launched by UN Special Envoy on Climate Action and Finance Mark Carney and the COP26 presidency, in partnership with the UNFCCC Race to Zero campaign, to coordinate efforts across all sectors of the financial system to accelerate the transition to a net-zero global economy. GFANZ was founded for two equally important purposes: to expand the number of net zero-committed financial institutions and to establish a forum for addressing sector-wide challenges associated with the net-zero transition, helping to ensure high levels of ambition are met with credible action. GFANZ brings together independent, sector-specific Alliances to tackle net-zero transition challenges and connects the financial community to the Race to Zero campaign, climate scientists and experts, and civil society.
B4NZ was formed with the aim of galvanising credible, demonstratable leadership from the UK banking sector on climate change. The initiative brings together banks, businesses, policymakers, and regulators to define and implement the interventions needed to accelerate the UK economy’s transition to net zero.
As part of the Glasgow Financial Alliance for Net Zero (GFANZ), we work alongside initiatives and organisations such as the Green Finance Institute, UK Finance and UNEP FI, as well as parliamentarians, government departments, regulators, civil society and business leaders. Our approach is designed to complement and build on existing efforts by catalysing new conversations targeted for maximum impact.
B4NZ are also Accelerators in the Race to Zero (RTZ). The RTZ is a United Nations-led campaign that is working to fill that gap between the climate commitments that have been made and what takes to meet them. It is the most extensive coalition ever dedicated to achieving net-zero carbon emissions by no later than 2050. Every member is required to adhere to stringent science-aligned standards and exert utmost effort to reduce carbon emissions significantly.
Our focus is strategic policy alignment. By creating clarity on which areas of the net zero transition require policies which can optimise the contribution financial institutions can make to the real economy, we enable both policymakers and financial institutions to play their part in accelerating the transition to net zero.
Our work is guided by the “north star” goal of accelerating the UK’s path to net zero – moving the date forward from 2050. This allows us to focus on the transformative solutions we need, rather than incremental steps.
| Could you please elaborate on your mission? What key challenges do you aim to address?
Bankers for Net Zero sits at the nexus of industry commitments, policy development, regulation, business, and civil society. Our work is guided by the “north star” goal of accelerating the UK’s path to net zero – moving the date forward from 2050. This allows us to focus on the transformative solutions we need, rather than incremental steps. We do this by combining different areas of expertise – government, finance and policy – with a collaborative approach grounded in multi-stakeholder conversations designed to allow ambitious thinking to flourish and make sure that net zero commitments are embedded into national legislation in the UK.
Specifically, there are three key challenges we seek to address:
〉Automating SME GHG reporting:
When we speak with banks and corporates in general, they mention that one of the main challenges they encounter in their sustainability journey is accessing data from the SMEs in their supply chains to report on their scope 3 emissions.
Despite the UK having 5.9 million SMEs contributing £2.3 trillion to the economy, there is no GHG reporting standard, which hampers SMEs’ emission measurement, and they lack enough incentives and resources to transition to net zero. This does not only mean that SMEs will be left behind in the transition but also brings significant challenges to financial institutions when reporting scope 3 emissions as that involves collecting data from the SMEs in their portfolios and supply chains. Now, data is posing a challenge which is hampering investments decisions towards net zero, but it is also the opportunity to leverage the power of data and embark on programmes like Perseus which makes automating GHG reporting for SMEs possible.
〉Financing retrofits:
Retrofitting homes is crucial for achieving net-zero emissions, particularly as buildings contribute to a substantial portion of global carbon emissions. At the moment, uptake of energy efficiency solutions is too low, and many consumers are facing fuel poverty due to lack of energy efficiency in their homes. Additionally, finance cannot flow towards retrofits at scale given we don’t have the right tools to measure energy efficiency. That’s why B4NZ advocates for better retrofit policies and EPC reform.
〉Greening agriculture:
Agriculture is responsible for 11% of total greenhouse gas (GHG) emissions in the UK, despite only representing 0.5% of GDP, according to the Department for Business, Energy, and Industrial Strategy. While the advantages of regenerative agriculture practices are gaining recognition, there is a considerable journey ahead before most farmers feel sufficiently supported, informed, and skilled to embark on their transitions. This factor has probably played a role in the limited adoption of new debt, including environmentally focused green loans. B4NZ launched a report on this topic last year with several policy recommendations to Government.
| B4ZN reach of impact goes from SMEs to regulators. How does it work? Can you give some project-level examples?
Bankers for Net Zero provides the bridge between businesses, policy makers, and regulators by advocating for specific policies to create an enable the right policy and regulatory environment that allows the mobilisation of capital towards net zero.
One of the programmes that shows how Bankers for Net Zero was able to bring regulators, businesses and policy makers together is our Perseus project. Our Perseus programme alongside our partners at Icebreaker One aims to develop whole-of-market solutions to create rapidly scalable, low-effort, low-friction sustainability reporting and unlock access to capital by automating GHG reporting for SMEs. Perseus is supported by a wide range of commercial partners, and its steering group is formed by numerous trade associations and organisations in the UK. We have done extensive work with ministers and parliamentarians on this matter, with Perseus having been championed by the UK Government, with a Dear CEO letter from Minister Stuart urging organisations to join the programme and included in the Green Finance Strategy as a crucial part of the decarbonisation architecture required to ensure the UK reaches its emissions reduction targets. At COP28, we launched our 2023 Progress Report and demonstrator alongside UK Government and set out our 2024 roadmap for further engagement with industry and government.
We have done extensive work with ministers and parliamentarians, with Perseus having been championed by the UK Government, with a Dear CEO letter from Minister Stuart urging organisations to join the programme and included in the Green Finance Strategy as a crucial part of the decarbonisation architecture required to ensure the UK reaches its emissions reduction targets.
Building on that, Bankers for Net Zero chairs the SME Advisory Group for the Transition Plan Taskforce, focused on sustainability reporting and sector specific recommendations to accelerate credible transition plan guidance for SMEs. The SMEs Advisory Group of B4NZ will take forward the work on considering proportionate sustainability reporting and transition planning for SMEs develop a proportionate minimum reporting baseline to allow SMEs to engage in low-effort, low-friction sustainability reporting.
This is just one of many examples of how we bring industry, regulators, and government together to advance net zero commitments and turn them into action.
| How do you support your members and who is welcome to join?
Our membership base is a powerful, diverse ecosystem open to everyone: businesses, banks, advisors, civil society, academia, trade bodies and policy makers. Sitting at the frontiers of change, we influence policy, amplify insight, facilitate collective impact, and enable real, demonstrable climate action. Through our strong convening power, and a deep and practiced understanding of the finance and business ecosystem and cross-party political networks, we advocate for bold policy making that reflects needs and removes barriers across industry. In doing so, we also provide a direct path to Government, acting as the bridge between the public and the private sector.
Our members are encouraged to get involved in our workstreams as much as time and human resource allows. Acknowledging the collective capacity of our ecosystem, B4NZ then curate and develop programmes of work to accelerate the transition to net zero in the near term. To do so, we facilitate a range of working groups, panels, roundtables and other events to drive progress. This includes numerous roundtables and events in Parliament with ministers, MPs, officials, and the shadow Government on issues that matter to our members.
Aside from this, we work with each of our members on a personal level to ensure they maximise their opportunities as a member of our ecosystem and support them on their sustainability journeys to ensure their net zero commitments are translated into action.
We are constantly looking to evolve and strengthen our membership base. Please contact us to find out more.
Have you already read?
“Failing to plan is planning to fail’’ – why transition planning is essential for banks | ECB
| about
Heather Buchanan is the Chief Executive Officer of Bankers for Net Zero, an initiative that brings together banks, businesses and regulators to support the financial sectors transition to net zero in the UK. She has extensive experience advising Government, trade bodies and civil society on the commercial relationship between banks and their customers. In 2021, Bankers for Net Zero was announced as the UK Country Chapter of the UN Convened Net Zero Banking Alliance, the first initiative of its kind in the world, to provide the bridge between the high level commitments that banks have made and implementation on the ground.
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.
