Net-zero for financial institutions

Developing the world’s first Standard for science-based net-zero targets in the financial sector.

We’ve launched a transparent, inclusive process to develop the first science-based global Standard for financial sector net-zero targets. This will enable financial institutions to set net-zero targets that are consistent with achieving a net-zero world by 2050.

Foundations for Science-Based Net-Zero Target Setting in the Financial Sector

Net-zero commitments in the financial sector are increasing. At COP26, financial institutions with more than US$130 trillion in assets under management committed to reaching a state of net-zero before 2050.

However, there has been a lack of standardization to evaluate and validate these pledges. This limits the ability of financial institutions to drive the decarbonization of the real economy needed to stabilize temperatures at 1.5°C above pre-industrial levels. In addition, the relatively slow progress (compared to the corporate sector) being made by the financial services industry post-COP26 to overcome competitive and regulatory hurdles and align itself with a 1.5°C pathway, evidenced by any clear, strategic progress having been made within the FI space at COP27, shows the effort is lacking direction and urgency.

The SBTi’s Net-Zero Standard for financial institutions is intended to move this process forward and provide the clarity and scientific basis the sector needs to achieve net-zero in its target-setting by 2050.

READ THE FOUNDATIONs PAPER

Aims of the SBTi Finance Net-Zero Standard development process

Our development process aims to:

Define the basis of a target-setting standard that enables financial institutions to use their influence to achieve economy-wide net-zero emissions by 2050
Provide clarity on key concepts, such as what it means to reach net-zero for a financial institution, transition metrics, and the components of credible science-based net-zero targets
Establish a financial institution net-zero (FINZ) Standard - including recommendations and qualitative and quantitative criteria to assess financial net-zero targets - through a transparent and inclusive multi-stakeholder engagement process

Foundations Paper and Public Consultation Feedback Summary on the Net-Zero for Financial Institutions Foundations

The Foundations for Science-Based Net-Zero Target Setting in the Financial Sector paper was published in April 2022. After a rigorous public consultation involving feedback from over 250 individuals in public workshops as well as 130 responses from an online survey, it represented the first step in developing a science-based, net-zero Standard for financial institutions. It sets out principles, definitions, metrics, and target formulation considerations for financial institutions to set quantitative net-zero targets linked with emissions reductions in the real economy.

The SBTi is continually building on this paper through a transparent, inclusive multi-stakeholder process involving financial institutions, NGOs, government officials, and other interested parties.

Governance and oversight

Subsequent to the public consultation and Foundations paper publication, the SBTi established a dedicated Financial Net-Zero Expert Advisory Group (EAG) to guide the development process.

The members of the Expert Advisory Group are:

Adrian Chapman, Head of Group Climate ALM, Legal & General
Adrian Fenton, PhD, Senior Programme Manager, Institutional Investors Group on Climate Change
Adriana Kocornik-Mina, Metrics and Research Senior Manager, Global Alliance for Banking on Values
Alberto Gervasini, Terra Lead, ING
Alex MacGillivray, Co-Chair, Joint Impact Model stichting
Alexandra Paltschik Rønneberg, Advisor, Corporate Responsibility, KLP
Amita Chaudhury, Group Head of Sustainability, AIA Group
Andrea Corsi, Vice President, ESG Risk, Deutsche Bank
Andrew Howell, CFA, Director, Investor Influence, Environmental Defense Fund
Andrew Hutchison, Director, Net Zero Strategy, Credit Suisse International
Anindita Pal, Partner, Sustainable Finance Transformation, EY Financial Services
Caroline Clarke, MD Sustainability Services Hub (FS), Accenture
Christine Mwangi, CFA, Africa Sustainable Investments and Infrastructure (ASI), WWF Kenya
Cynthia Cummis, Sustainability and Climate Expert Leader, Deloitte
Eric Christensen, Vice President, Sustainability, Energy and Climate Change, WSP USA
Flora Min, Senior Manager, Deloitte
Franco Piza, Corporate Director of Sustainability, Bancolombia Group
Gauthier Faure, Senior Research Manager, Sustainable Finance, EcoAct
Gustav Magnusson, Manager, Group Sustainability, EQT
Ian Edwards, Industry Fellow, Griffith University
Jan Willem van Gelder, Director , Profundo
Jane Thorstrup Jagd, Deputy Director, Net Zero Finance, We Mean Business Coalition
Jean-Yves Wilmotte, Head of Finance Practice, Carbone 4
Jesica Andrews, Investment Lead, UNEP FI
Joy Williams, Executive Director, Financial Institution Net-zero Transition Plans, GFANZ
Julia Bingler, PhD, Fellow - Monetary Policy, Council on Economic Policies
Julien Manceaux, Senior Manager, Decarbonization Strategy Sustainability & Corporate Citizenship, TD Bank Group
Katharina Dittrich, Associate Professor, Warwick Business School
Kees Ouboter, Senior Responsible Investment Officer, ACTIAM
Kerry Constabile, Net Zero and Sustainability Strategy Delivery, Standard Chartered Bank
Lars Erik Mangset, Head of Sustainable Finance, Grieg Investor
Leyla Javadova, Lead for ESG Data and Analytics in Investments, Allianz
Lucy McCracken, Senior Manager – Climate, Public Affairs, Aviva
Marcus Bruns, SVP, Nordic Head of Sustainability, Storebrand
Minyoung Shin, Senior Strategist, Global Sustainable Finance, The Sunrise Project
Mischa Repmann, PhD, Senior Sustainability Risk Manager, Swiss Re
Nicole Röttmer, PhD, Partner, Climate Leader, PwC
Patricia Moles , Senior Advisor, Iniciativa Climática de México
Paul Greenop, Head of Portfolio Management, Clean Energy Finance Corporation
Paul Schreiber, Campaigner, Reclaim Finance
Peter Sandahl, Head of Sustainability, Nordea Life & Pension
Raphael Slade, Senior Research Fellow, Imperial College
Richard Cantor, Vice Chair, Moody's Investor Service
Serge Younes, PhD, Head of Sustainability, InvestIndustrial
Shu Ling Liauw, Lead Analyst, Global Climate Insights
Skender Sahiti-Manzoni, Head of Sustainable Commitments & Stakeholder Engagement, La Banque Postale
Sofía Burford Arauetes, Climate Strategy Leader, ImplementaSur
Sylvain Vanston, MSCI Climate Research, MSCI ESG
Xavier Lerin, Senior Research Manager, ShareAction

Development timeline

An outline of the provisional development process through the first half of 2023 is set out below.

April 2022: Publication of the Foundations for Science-Based Net-Zero Target Setting in the Financial Sector paper
June - August 2022: Finalization of the SBTi FI Net-Zero Expert Advisory Group
August - Decembe 2022: Preparation of papers on key pillars of a FINZ Standard
January - March 2023: development of Criteria and Metacriteria (in consultation with EAG and advisors at Bain & Co.), with subsequent road-testing among selected FIs, NGOs and other interested parties
March - April 2023: internal SBTi and stakeholder approval of FINZ Standard
Post-April 2023: publication of Exposure Draft
Q2 - Q4 2023: further public consultation via webinars, workshops and further road-testing, plus drafting of other aspects/pillars required for a comprehensive FINZ Standard
Q4 2023 - early 2024: Launch of Financial Institution Net-Zero Standard