
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.
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
- SofÃa 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
Contact
For queries relating to the development process, please contact finance@sciencebasedtargets.org
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