Financial Institutions
The finance sector is key to unlocking the system-wide change needed to reach a net-zero global economy. The SBTi offers two science-based frameworks tailored to the sector.
SBTi target setting for financial institutions
Financial institutions have two options for setting targets with the SBTi:
- Financial Institutions Net-Zero Standard: Requires financial institutions to set both near-term and long-term targets that align portfolios with net-zero emissions by 2050.
- Financial Institutions Near-Term Criteria: Focuses on reducing emissions across specific investment and lending activities over the next 5-10 years.
Read our blog comparing the two documents.
Please note that targets validated under the Near-Term Criteria cannot be transferred to the Net-Zero Standard. Financial institutions with existing near-term targets must update them in line with the Net-Zero Standard if they wish to seek validation of net-zero targets.
The Financial Institutions Net-Zero Standard
In July 2025, the SBTi launched its first Financial Institutions Net-Zero Standard—a science-based, robust, and credible framework that enables financial institutions to align financial flows with pathways to limit global warming and achieve net-zero emissions by no later than 2050.
Created in consultation with and tested by financial institutions, the Standard is designed for institutions of all sizes and geographies to use across their lending, asset owner investing, asset manager investing, insurance underwriting, and capital market activities.
The Standard aims to deliver the greatest impact by supporting financial institutions’ catalytic role. It empowers them to choose targets for the net-zero alignment of portfolios, utilizing engagement and investment levers to drive real-world transformation.
Ready to get started? Explore our resources:
- Financial Institutions Net-Zero Standard: Provides criteria for financial institutions to set net-zero science-based targets. Access translations in Arabic, Chinese, French, Indonesian, Japanese, Portuguese, and Spanish
- Financial Institutions Net-Zero Standard One-Page Summary: Outlines the key elements of the Standard. Access translations in Arabic, Chinese, French, Indonesian, Japanese, Korean, Portuguese and Spanish.
- Financial Institutions Net-Zero Standard In Brief: Gives an accessible overview of the Standard for those thinking of setting targets. Access translations in Arabic, Chinese, French, Indonesian, Japanese, Portuguese, and Spanish.
- Financial Institutions Net-Zero Standard FAQ: Answers common questions on the Standard, including how it aligns with other SBTi Standards and how different criteria apply across asset classes.
- Financial Institutions: How to Apply Relevant SBTi Corporate Net-Zero Standard V1.3 Criteria: Outlines which criteria from the current Corporate Net-Zero Standard V1.3 apply to different types of financial institutions setting net-zero targets.
Want to get started? Find out how to set a target.
The Financial Institutions Near-Term Criteria
First launched in 2020, and updated to Version 2 in 2024, the Financial Institutions Near-Term Criteria enables financial institutions to set science-based targets on their financed emissions in the near term—covering a 5-10 year timeframe. To date, over 165 financial institutions have had their targets validated using this Criteria.
In November 2021 the SBTi also released its Private Equity Sector Science-Based Target Guidance, which has helped over 40 firms set near-term targets.
Financial institutions with existing commitments under the Financial Institutions Near-Term Criteria may either proceed with setting near-term targets using this Criteria until at least the end of July 2027, or choose to increase their ambition and set targets in line with the Financial Institutions Net-Zero Standard.
Why take action?
Climate change is no longer a distant threat—it is a present-day driver of economic instability. In 2025, the Financial Stability Board warned that climate risks are threatening global financial stability through both transition risks—such as abrupt changes in policies, technological innovations, or consumer preferences—and physical risks including floods, droughts and windstorms. Insurers are reporting surging claims from extreme weather, with some regions on the verge of becoming uninsurable. Meanwhile, the European Central Bank estimates that drought-related risks alone could shrink Eurozone GDP by 15%, putting over €1.3 trillion in loans at risk.
Without urgent action, climate-related financial losses could escalate rapidly. One study estimated that the indirect economic losses from climate change on global supply chains alone could bring net economic losses of up to $25 trillion by 2060.
Financial institutions have a pivotal opportunity to help steer the global economy toward a net-zero future by 2050. By setting science-based targets, they mitigate their exposure to climate-related transition risks, build resilience and maintain competitiveness in a rapidly transforming market, all while supporting real-world net-zero transformation.
The Financial Institutions Net-Zero Standard and Financial Institutions Near-Term Criteria provide robust, science-based frameworks to support this goal. Developed through extensive stakeholder engagement, they are globally applicable, practical to implement, and designed to guide financial institutions in future-proofing their strategies while driving climate impact through their portfolios.
Find out more: Financial Institutions Net-Zero Standard
Target-setting resources
- Financial Institutions Net-Zero Standard: Provides criteria for financial institutions to set net-zero science-based targets. Access translations in Arabic, Chinese, French, Indonesian, Japanese, Portuguese, and Spanish.
- SBTi Services Financial Institutions Net-Zero Submission Form: Provides a standardized method to compile and submit necessary information for the target validation process.
- Financial Institutions Net-Zero Target-Setting Tool: Helps calculate the minimum required ambition for portfolio climate-alignment targets, determine the climate alignment of counterparties, and understand the minimum required ambition for sector-specific targets.
- For the maritime, buildings, and forest, land, and agriculture (FLAG) sectors, financial institutions should use the SBTi Maritime Transport Tool, Buildings Target-Setting Tool, and FLAG Target-Setting Tool, respectively.
- Target-Setting Methods and Tool Documentation: Includes detailed explanation of algorithms for the target-setting methods used within this Standard.
- SBTi Services Criteria Assessment Indicators: Provides verifiable control points, which will be evaluated during the target validation process to assess conformity with this Standard.
- SBTi Fossil Fuel Transition Policy and Target Template: Provides an optional template that may be used by financial institutions that set fossil fuel transition policies and targets under the SBTi Financial Institutions Net-Zero Standard.
Using the Financial Institutions Net-Zero Standard with other SBTi resources
- Financial Institutions: How to Apply Relevant SBTi Corporate Net-Zero Standard V1.3 Criteria: Outlines which criteria from the current Corporate Net-Zero Standard V1.3 apply to different types of financial institutions setting net-zero targets.
- User Guide for Financial Institutions with Real Estate Exposure: Explains how the Financial Institutions Net-Zero Standard and the SBTi Buildings Criteria are used together, where applicable.
Background information
- Financial Institutions Net-Zero Standard One-Page Summary: Outlines the key elements of the Standard. Access translations in Arabic, Chinese, French, Indonesian, Japanese, Korean, Portuguese, and Spanish.
- Financial Institutions Net-Zero Standard In Brief: Gives an accessible overview of the Standard for those thinking of setting targets. Access translations in Arabic, Chinese, French, Indonesian, Japanese, Portuguese, and Spanish.
- Financial Institutions Net-Zero Standard Executive Summary: Includes high-level information on net-zero target setting for financial institutions.
- Financial Institutions Net-Zero Standard FAQ: Answers common questions on the Standard, including how it aligns with other SBTi Standards and how different criteria apply across asset classes.
- 'Explaining the Standard' Slide Pack: Guides users through the main elements of the Standard.
- Net-Zero Jargon Buster: Breaks down key terminology from the Standard.
- Basis for Conclusions Report: Gives further insight into how the Standard was developed.
- Global Launch Webinar Recording: Presenters provide an overview of the Standard, a deep dive into the criteria, and the answer to some frequently asked questions. Access the Global Launch Webinar Slide Pack and view translated recordings in Chinese, French, Portuguese, and Spanish.
Implementation list for climate alignment target setting
To strengthen interoperability with the broader climate ecosystem, the Financial Institutions Net-Zero Standard allows financial institutions to use eligible third-party methodologies, taxonomies and other data sources to assess how their portfolio companies and activities align with net-zero pathways and set alignment targets.
- Financial Institutions Net-Zero Standard Implementation List identifies which third-party resources may be used specifically for near- and long-term climate alignment target setting, but not for other targets within the Standard. Translated into Arabic, Chinese, French, Indonesian, Japanese, Portuguese, and Spanish.
- Financial Institutions Net-Zero Standard Protocol for Usage of Third-Party Methodologies sets out the process for how the SBTi evaluates third-party methodologies—ensuring they align with best practice criteria—and explains how eligible methods are added or removed. Translated into Arabic, Chinese, French, Indonesian, Japanese, Portuguese, and Spanish.
These documents facilitate interoperability between the Financial Institution Net-Zero Standard and other established methods and metrics in the financial sector, helping to make the path to setting net-zero targets more accessible and in line with current practices.
Financial institutions with near-term-only target commitments that sought the finance commitment extension prior to the publication of the Financial Institutions Net-Zero Standard have until July 31, 2027, to submit their targets for assessment by SBTi Services.
This extension is designed to give financial institutions the time they need to thoroughly assess the available target-setting frameworks.
- Project initiation: The project started in 2021. The Foundations for Science-Based Net-Zero Target Setting in the Financial Sector was published in 2022, providing principles, definitions, metrics, and target formulation considerations for financial institutions to set net-zero targets.
- Public consultations: The SBTi held two public consultations for expert feedback on the draft resources. The first one from June-August of 2023, and a second consultation from July-October of 2024. Between these periods, the resources were updated based on input received. Read the first public consultation feedback summary and the second public consultation feedback summary.
- Pilot testing: The draft Standard was pilot tested by 33 financial institutions from August-December 2024. The pilot involved hands-on trials with financial institutions using real-world data to test the draft Standard, and provide feedback on its implementation. Read the pilot test feedback report.
- Final publication: The Financial Institutions Net-Zero Standard Version 1.0 was published in July 2025 following approval by the Technical Council and adoption by the Board of Trustees.
The SBTi established and regularly convened a dedicated Expert Advisory Group (EAG) of technical experts from corporates, finance, non-profits and multilateral organizations who served in a voluntary advisory capacity throughout the development of the project. It was disbanded in July 2025 and included the following individuals:
- Adrian Chapman - Legal & General
- Adrian Fenton - Institutional Investors Group on Climate Change
- Alberto Gervasini - ING
- Alex MacGillivray - Joint Impact Model Foundation
- Alexandra Rønneberg - KLP
- Amanda Selhammer - Storebrand
- Andrew Hutchison - UBS
- Angelica Afanador - PCAF - Partnership for Carbon Accounting Financials
- Anindita Pal - EY
- Benjamin McCarron - Asia Research & Engagement
- Betsy Middleton - The Sunrise Project
- Butch Bacani - United Nations Environment Programme Finance Initiative
- Caroline Clarke - Accenture
- Christina Ng - Energy Shift Initiative
- Connor Chung - The Institute for Energy Economics and Financial Analysis
- Cynthia Cummis - Deloitte
- Daan Van Acker - InfluenceMap
- Duncan Lee - AIA
- Franco Piza - Bancolombia
- Gauthier Faure - Atos
- Georgina Smit - Green Building Council South Africa (GBCSA)
- Gustav Magnusson - EQT
- Harriet Assem - BVCA
- Ian Edwards - Griffith
- Jan Willem van Gelder - Profundo
- Jane Thostrup Jagd - WMBC
- Jesica Andrews - United Nations Environment Programme Finance Initiative
- Julia Bingler - Council on Economic Policies
- Justine Bolton - First Rand
- Katharina Dittrich - WBS
- Kerry Constabile - Oxford Environmental Change Institute (University of Oxford)
- Lars Erik Mangset - Greig
- Leonie Ederli Fickinger - Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)
- Lizeth Palencia - PRI
- Luis Alejandro Meija - IDB Invest
- Matthew Swabey - Aviva Group
- Neha Khanna - Climate Policy Initiative
- Nils Bartsch - Urgewald
- Patricia Moles - Instituto Tecnológico Autónomo de México
- Paul Schreiber - Reclaim Finance
- Peter Sandahl - Nordea
- Rebecca Lea - Association of British Insurers
- Richard Cantor - Moody’s
- Serge Younes - Investindustrial
- Shuling Rao - Beijing Green Finance Association
- Skender Sahiti-Manzoni - La Banque Postale
- Sofía Burford - Implementasur
- Stanislas Ray - ADEME
- Taehan Kim - Korea Sustainability Investing Forum (KoSIF)
- Tanguy Sene - MSCI
- Xavier Lerin - Shareaction
- Xi Liang - University College London
EAG members volunteered in a personal capacity to provide technical advice over the duration of the project. While their expertise helped guide the development process, final content decisions rest solely with the SBTi. As a result, the final output does not necessarily represent or imply endorsement by individual EAG members or their employers.
Find out more: Financial Institutions' Near-Term Criteria
Target-setting resources
- Financial Institutions’ Near-Term Criteria Version 2.0: Allows financial institutions to set near-term, science-based emissions reduction targets. Translated into Arabic, Chinese, French, Japanese, Portuguese, and Spanish. Please note that all targets must be submitted in English.
- SBTi Services Financial Institutions Target Submission Form V2.1: Target setting entities need to complete this form to submit near-term targets for validation purposes.
- SBTi Services Criteria Assessment Indicators: Outlines the major checks conducted by SBTi Services during the validation process.
- Corporate Near-Term Tool: Models targets with a 1.5°C ambition. It was developed for companies and can be applied to sector-level components of financial institutions’ portfolios, including power and cement. Financial institutions seeking to set 1.5°C-aligned targets on emissions related to other sectors with SBTi guidance available should refer to the applicable sector-specific tools on the sector webpages listed below:
- Science-based target-setting tool: For use only by financial institutions who want to model targets with a well-below 2°C ambition, and is to be applied to sector-level components of financial institutions’ portfolios. For those using the Financial Institutions Near-Term Criteria V2 to set targets, the tool can be used for the following sectors:
- Aluminium
- Pulp and paper
- Financial tool demonstrations
- Finance Tool User Guide
- Finance tool demonstration
- Finance Tool user workshop recording and slides
- Finance Tool tech deep dive recording and slides
- Finance tool background information
Background information
- Financial Institutions’ Near-Term Criteria in Brief: Provides a high-level overview of how different types of financial institutions can use the near-term criteria to set science-based targets.
- Financial Institutions’ Near-Term Criteria V2 Explanatory Document: Provides practical guidance to those using the criteria.
- Financial Institutions’ Near-Term Criteria V2 Main Changes Document: Summarizes the development process, outlines the main updates from V1 to V2 and sets out the key issues and concerns that were addressed.
- Private Equity Sector Science-Based Target Guidance V1: Enables private equity firms to set near-term science-based targets.
- FAQs on the Private Equity Sector Science-Based Target Guidance: Answers some of the most frequently asked questions from private equity firms wanting to set near-term science-based targets.
The Financial Institutions Near-Term Criteria V1 was first published in February 2022.
The main stages of the Financial Institutions Near-Term Criteria V2 project were as follows:
- Project initiation: The project started in April 2022.
- Public consultation: The SBTi ran a public consultation on the draft Criteria from June-August 2023. Feedback received helped inform the second draft of the Criteria for pilot testing.
- Pilot testing: The revised draft was tested by a group of 28 financial institutions using real-world data from December 2023-February 2024.
- Publication: Version 2 of the Criteria was published in May 2024.
Find out more about the development of the Criteria in the launch webinar and explainer blog.
To provide feedback on the SBTi's resources for financial institutions, use the Financial Institutions Standard and Guidance Feedback Form.
For queries related to our financial institutions work, please contact financialinstitutions@sciencebasedtargets.org.
Stay up to date with the latest developments in science-based targets for financial institutions by signing up to our finance newsletter.
Latest News
View News
