Financial institutions with $ 130 billion in assets adhere to science-based net zero standard
Financial institutions with a combined $ 130 billion asset management portfolio have signed an ambitious plan that envisions “reaching a state of net zero” by 2050 using a standard of “science-based targets” developed by the eponymous Science Based Target (SBTi) initiative.
The global energy transition is gaining momentum – and the accompanying news feed is becoming a deluge of information. Separate the green giants of greenwash and the hard facts from the clickable bait headlines with Reload Agenda, our curation of the week’s market-making events, distilled into a quick-read newsletter. Register now here free
The Net-Zero Foundations for Financial Institutions document, launched by SBTi – a partnership between the environmental organization CDP, the United Nations Global Compact, the World Resources Institute and the World Wide Fund for Nature – at the COP26 climate conference in Glasgow , in Scotland, is designed to inspire financial institutions to use their “unique capacity and influence to fund effective climate transition activities in the real economy”.
“Financial institutions have started to focus on net zero as a guiding principle for their ambition to mitigate climate change. However, the lack of coherent principles, definitions, measures and evidence of effective strategies to achieve net zero targets limits the ability of financial institutions to support the emission reductions in the real economy that is necessary to stabilize temperatures at 1.5 ° C above. pre-industrial levels, ”SBTi said.
The SBTi underlined that while the financial sector has not “exercised direct control over the main sources of [greenhouse gas] emission reductions ”, he had a“ unique influence on the other actors in this [it] provides capital and services to companies charged with reducing their GHG emissions ”and was therefore“ critical ”to drive the systemic decarbonization aligned with the Paris Agreement of the global industrial base.
The organization, which has 2,100 cross-sector members, 22% of whom are Global Fortune 500 companies, said as research indicated that 77% of global emissions and 80% of global gross domestic product were “covered by net zero commitments ”, companies used“ a combination of different strategies to decarbonize their portfolios and invest in new climate solutions ”, but without a common benchmark with which to“ compare targets and assess whether the actions taken are sufficient to achieve a global economy net zero. by 2050 “.
The Net-Zero Foundations for Financial Institutions, The standard, which is supported by organizations such as Bank of New York Mellon, Dutch Platform Carbon Accounting Financials, Caisse de Dépôt et Placement du Québec, Bloomberg Philanthropies and William & Flora Hewlett Foundation, said the SBTi, “would ensure consistency, [by establishing] a common understanding is needed to navigate the diverse landscape of today’s net zero goal setting ”.
The article continues under the ad
In order to produce a “relevant, actionable and robust” outcome document, the SBTi noted that the review process will include financial institutions, NGOs, government officials, as well as other stakeholders.
“The ensuing zero net standard development process will generate actionable criteria, detailed guidance and technical resources to help financial institutions formulate and implement science-based net zero goals,” said the SBTi, which is funded by the Ikea Foundation. , Amazon, the Bezos Earth Fund, We Means Business, the Rockefeller Brothers Fund and the UPS Foundation.
The Net-Zero Foundations for Financial Institutions The standard is due to be finalized in early 2023, said SBTi, which said it is currently assessing “the extent to which fossil fuel requirements should be made explicit as part of any net zero target based on science “as part of a global decarbonization framework.