Net-zero for financial institutions
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 is currently 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.
The SBTi’s Net-Zero Standard for financial institutions will bring the clarity and scientific basis the sector needs to achieve net-zero by 2050.
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 clear net-zero standard for financial institutions - including recommendations and qualitative and quantitative criteria to assess financial net-zero targets - through a transparent and inclusive multi-stakeholder engagement process
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 represents 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 building on this paper through a transparent, inclusive multi-stakeholder process involving financial institutions, NGOs, government officials, and other interested parties.
A public consultation on a draft of the paper was conducted between November 2021 and January 2022. Feedback was gathered from over 250 individuals in public workshops as well as 130 responses from an online survey.
Governance and oversight
The SBTi is establishing a dedicated Financial Net-Zero Expert Advisory Group (EAG) to guide the development process. Advice and input is also provided by the SBTi’s existing Financial Expert Advisory group.
Provisional development timeline
An outline of the development process is set out below. A more detailed timeline will follow soon.
- Nov-Dec 2021: Consultation on Net-Zero for Financial Institutions Foundations Draft
- Jan-Mar 2022: Finalization of Net-Zero for Financial Institutions Foundations
- Jan-Mar 2023: Launch of final Financial Net-Zero Standard
The SBTi hosted an online event to launch the development process on 10 November, 2021. The webinar commenced a 5-week public comment period that will be followed by revisions and publication of the updated Foundations for Science-Based Net-Zero Target Setting in the Financial Sector document in the first quarter of 2022.