Why should financial institutions take action?

More than 100 financial institutions (FIs) worldwide have used SBTi criteria to set Paris-aligned near-term science-based emissions reduction targets across their operations and portfolios. Another 200+ banks, asset managers and private equity firms, asset owners, insurance companies, and other FIs have committed to set their own science-based targets in the near future.

FIs are increasingly recognizing the extent of climate risks and their influence on the global economy. Investment, lending and insurance activities must be urgently reviewed to avoid catastrophic climate change and fund a climate-secure, net-zero future.

FIs can take action today by committing to set science-based targets and viewing our resources to develop targets.

About the SBTi’s Finance Sector Resources

The SBTi first launched the project to enable FIs to set near-term science-based emissions reduction targets in 2018. After a two-year development process, including expert advisory groups (EAGs), public consultations and pilot testing, the SBTi launched the Financial Sector Science-Based Targets Guidance, including the Criteria and Recommendations for Financial Institutions, in October 2020. In May 2024, a suite of revisions to near-term target-setting resources for FIs, including the Financial Institutions’ Near-Term Criteria Version 2.0, were released. The changes include criteria updates and clarifications to increase ambition as well as improve usability and clarity.

Separately, the SBTi is currently working on developing a Financial Institutions Net-Zero (FINZ) Standard, which will require both near- and long-term targets that are consistent with achieving net-zero across FIs’ portfolios by 2050.

Financial support for this work is provided by Bloomberg Philanthropies and ClimateArc, in addition to core SBTi funding from other sources.

What’s next?

Financial Institutions’ Near-Term (FINT) Criteria

In May 2024, the SBTi released FINT Criteria V2, along with a Main Changes Document, Criteria Assessment Indicators for FINT Criteria V2 and an explanatory document that can all be found in the resources section below. These documents align with the Corporate Net-Zero Standard, provide clarifications, increase ambition levels, help address challenges raised by FIs, and introduce criteria to address FIs' fossil fuel-related activities. A description of the various documents and key changes in FINT Criteria V2 can be found in this news bulletin.

These documents have gone through multiple rounds of research and drafting, including public consultation, pilot testing, and approvals by the Technical Council and SBTi Board. The development process of FINT Criteria V2 followed a streamlined version of the procedures outlined in the Standard Operating Procedure for Development of SBTi Standards because the project was already in an advanced stage of development when the procedure was formally adopted; however, the SBTi adhered to the procedures and processes where possible. More information on the development process as well as a list of revisions in FINT Criteria V2 can be found in the Main Changes Document.

The documents will be in effect as of 30 November 2024. All target submissions from FIs that are received by the SBTi prior to 30 November 2024 can be assessed against criteria version 1.1 or 2.0. FIs that have SBTi-validated targets are not required to update their targets for five years subsequent to their validation date, at which time the targets will need to be aligned with the latest available criteria. However, FIs are encouraged to update with the latest criteria as soon as possible.

Financial Institutions Net-Zero Standard

Alongside the FINT Criteria V2, the SBTi held a public consultation on the Financial Institutions Net-Zero (FINZ) Standard Conceptual Framework and Initial Criteria for FIs in 2023. Feedback received from the public consultation has been reviewed to support the ongoing development of the FINZ Standard.

The SBTi also began work on the insurance sector with the release of an Insurance Underwriting Industry Brief in 2023. The brief provides background information on potential methods for setting science-based targets to decarbonize insurance underwriting portfolios. Continued work on the insurance sector will be included in the development of the FINZ Standard.

What is the SBTi’s definition of a financial institution?

The SBTi defines an FI as an entity that generates 5% or more of its revenue from investment, lending, or insurance activities. This includes but is not limited to banks, asset managers and private equity firms, asset owners and insurance companies, and mortgage real estate investment trusts (REITs). Real economy companies that have more than 5% of revenue from financial activities are encouraged to use SBTi to set targets on those activities in addition to their corporate targets. Currently, public FIs such as central banks and multilateral development banks are not covered within the SBTi framework.

Learn more

Browse more sectors

If your sector is not listed here, you can still set a science-based target using our methods and resources. Consult the step-by-step guide to get started.

Sector Status
Aluminum Scoping Phase View
Apparel and footwear Finalized View
Aviation In Development View
Buildings In Development View
Chemicals In Development View
Cement Finalized View
Financial institutions Finalized View
Forest, Land and Agriculture (FLAG) Finalized View
Information and Communication Technology (ICT) Finalized View
Land Transport In Development View
Maritime Finalized View
Oil and Gas In Development View
Power Finalized View
Steel Finalized View