SBTi launches ‘Foundations’ paper to help FIs meet net-zero targets
April 22, 2022
The paper will provide financial institutions with net-zero solutions aligned with 1.5°C.
The Science Based Targets initiative (SBTi) is publishing a new ‘Foundations’ paper that provides financial institutions with new concepts for defining and tackling net-zero targets.
The paper focuses on a range of emerging issues within the sector, including the gradual move away from fossil fuels and using offsets, providing a range of definitions and concepts for banks, asset owners and asset managers in relation to putting net-zero targets into place.
The ‘Net-Zero Foundations for Financial Institutions’ paper is the next stage in the SBTi’s Net-Zero Standard for Financial Institutions, which is due to be launched in early 2023.
Given that financial institutions managing $130 trillion in assets are committed to achieving net-zero emissions by 2050, the new paper provides clarity on scientific methods the sector can use to set targets aligned with the Paris Agreement and 1.5°C.
Nineteen financial institutions, including asset manager Schroders, South Korean bank KB Financial Group and EQT, a Swedish private equity firm, currently have an approved set of science-based targets aligned with 1.5°C.
As of April 2022, more than 50 financial institutions will have made a commitment to setting net-zero targets, and an additional 140 are committed to establishing near-term targets.
This paper builds on the previous work of the SBTi, which launched its Corporate Net-Zero Standard in October 2021.
SBTi CEO Dr. Luiz Fernando Amaral said: “Financial institutions are critical players in driving real-economy emissions reductions through investments and lending activities. There are signs the sector is embracing this responsibility. Immediate action is already possible for short-term science-based targets.
“However, when it comes to net zero, there is little understanding of what it means for the finance industry. Our paper provides the clarity that has been desperately needed and will enable us to develop a Net-Zero Standard for financial institutions that will help net-zero pledges deliver science-based action.”Last Updated: 22 April 2022