Financial Institutions
The finance sector is key in driving system-wide decarbonization. Financial institutions can reduce their own emissions while directing the transition finance 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: Defines the requirements for financial institutions to set both near- and long-term targets that align portfolios with net-zero emissions by 2050. It covers lending, asset owner investing, asset management investing, insurance underwriting, and capital market activities.
Financial Institutions Near-Term Criteria: Outlines the requirements for financial institutions to set targets to reduce emissions across specific investment and lending activities over the next ten years.
To identify the most appropriate framework for your organization, explore the Financial Institutions Getting Started Guide and read our blog comparing the two frameworks.
Please note that targets validated under the Near-Term Criteria cannot be transferred to the Financial Institutions 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 SBTi has released four learning modules for financial institutions on the SBTi Academy—an online platform offering interactive learning journeys. These modules cover a range of topics from the role of the finance sector in climate action to applying the SBTi’s target-setting frameworks in practice. They are intended for anyone supporting financial institutions in setting science-based targets, including in-house sustainability professionals and external consultants. Visit the SBTi Academy to learn more.
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 activities 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 or 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 targets on their operational and financed emissions in the near term—covering up to a 10-year timeframe.
In November 2021, the SBTi also released its Private Equity Sector Science-Based Target Guidance.
Financial institutions may choose whether to set targets using the Financial Institutions Near-Term Criteria or the Financial Institutions Net-Zero Standard until at least the end of July 2027.
Ready to get started? Explore our resources or find out how to set a target.
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, fires, droughts and windstorms. Insurers are reporting surging claims from extreme weather, with some regions and risk types 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, financial institutions can mitigate their exposure to climate-related transition risks, while benefitting from the market opportunities that the economy-wide transition to net-zero provides.
The Financial Institutions Net-Zero Standard and Financial Institutions Near-Term Criteria provide robust, science-based frameworks designed to support financial institutions to future-proof their strategies, while driving climate impact.
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. (See translations in Arabic, Chinese, French, Indonesian, Japanese, Korean, Portuguese, and Spanish).
- Financial Institutions Net-Zero Standard Implementation List: Identifies which resources, including from third parties and taxonomies, may be used specifically for near- and long-term climate alignment target setting (see translations in Arabic, Chinese, French, Indonesian, Japanese, Korean, Portuguese, and Spanish).
- The List was updated in September 2026 to include the latest eligible methodology versions and taxonomies, as well as some general language clarifications. A full list of updates can be found on page three.
- 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.
- This tool was updated in September 2026, to temporarily pause the calculation of technology share targets for the power sector and emissions intensity reduction targets for the automotive sector, pending finalization of the respective SBTi Sector Standards. All other target-setting functionalities remain unchanged. A complete list of updates is provided in Tab 1 of the tool.
- 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.
- SBTi Services Financial Institutions Net-Zero Submission Form: Provides a standardized method to compile and submit necessary information for the target validation process.
- 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.
- SBTi Services Criteria Assessment Indicators: Provides verifiable control points, which will be evaluated during the target validation process to assess conformity with this Standard.
- Target-Setting Methods and Tool Documentation: Includes detailed explanation of algorithms for the target-setting methods used within this Standard.
- This document was updated in September 2026 to provide additional specifications on the Benchmark Divergence Methodology, and reflect the temporary pause of technology share targets for the power sector and emissions intensity reduction targets for the automotive sector, pending finalization of the respective Sector Standards A full list of updates can be found on page four.
Applying the Financial Institutions Net-Zero Standard.
- Financial Institutions: How to Apply Relevant SBTi Corporate Net-Zero Standard V1.3.1 Criteria: Outlines which criteria from the current Corporate Net-Zero Standard V1.3.1 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.
- Insurance Underwriting Explanatory Note: Provides guidance on practical implementation of the Financial Institutions Net‐Zero Standard for insurance underwriting portfolios.
Background information
- Financial Institutions Net-Zero Standard One-Page Summary: Outlines the key elements of the Standard. (See 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. (See 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.
- 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. (See translations in 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. (See translations in into Arabic, Chinese, French, Japanese, Portuguese, and Spanish).
- SBTi Services Financial Institutions Target Submission Form V2.3: Target setting entities need to complete this form to submit their near-term targets for validation purposes.
- SBTi Services Criteria Assessment Indicators: Provides verifiable control points, which will be evaluated during the target validation process to assess conformity with the Criteria.
- Corporate Near-Term Tool: Models targets according to 1.5°C pathways. 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 targets according to 1.5°C pathways 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 which want to model their near-term targets according to well-below 2°C pathways, 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
- Methodologies for Portfolio Temperature Rating targets
- See the Financial Institutions Net-Zero Standard Provisional Implementation List for eligible implied temperature rise methodologies
- For financial institutions that have already set targets according to the CDP-WWF Temperature Rating Methodology Version 1.0, it is recommended to disclose short- and long-term scores, along with the required mid-term scores, when reporting progress against already validated near-term targets. Refer to the finance tool background information:
Background information
- Financial Institutions’ Near-Term Criteria V2 in Brief: Provides a high-level overview of how financial institutions can use the near-term criteria.
- Financial Institutions’ Near-Term Criteria V2 Explanatory Document: Provides background information for those using the criteria.
- Financial Institutions’ Near-Term Criteria V2 Main Changes Document (from V1): Includes 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. This document should be read in conjunction with Financial Institutions Near-Term Criteria V2.
- 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 main stages of the project for updating the Financial Institutions Near-Term Criteria from V1 to V2 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.
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