The US Department of the Treasury has published the Principles for Net-Zero Financing & Investment, which highlight emerging best practices for private sector financial institutions that have made net-zero commitments and promote consistency and credibility in approaches to implementing them.
Accompanying the release of the Principles are a number of announcements including from other bodies working towards net zero financing. The Glasgow Financial Alliance for Net Zero (GFANZ) announced that more than 50 US financial institutions – and more globally – will independently publish net-zero transition plans over the next year using the voluntary common frameworks developed by GFANZ and financial sector alliances. In addition, the GFANZ Secretariat launched a 45-day consultation on its work to further refine the definitions of its transition finance strategies and support financial institutions in forecasting the impact of these strategies on reducing emissions, with a final report to be released at COP28.
The Rocky Mountain Institute (RMI) Center for Climate-Aligned Finance (CCAF) also announced that it will launch frameworks for the aluminium and aviation sectors to help lenders measure and disclose their lending-related portfolio emissions for these sectors, which each account for 2 percent of global emissions per year. The frameworks will launch in December 2023 for aluminum and January 2024 for aviation. In addition, RMI will launch a new Transition Finance Resource Hub in 2024 which will include a series of how-to guides to help banks overcome barriers to mobilizing transition capital.
The Partnership for Carbon Accounting Financials (PCAF) said that it will train and support up to 2,500 financial industry professionals on greenhouse gas accounting methodologies and reporting through its new PCAF Academy. PCAF also plans to publish the first-ever standard for facilitated emissions later this year. The standard will cover capital markets transactions and provide the finance sector with a harmonized method to measure the climate impact of those transactions and a metric that enables them to set science-based targets and inform strategies for transition finance.
The Center for Climate and Energy Solutions (C2ES) announced it will work with over a dozen large, publicly traded companies across sectors to develop insights on how they are developing and communicating their net-zero transition plans to their investors, policymakers, and the public. Over the next three years, this effort will support the development of businesses’ net zero transition plans, identify interdependencies between industry sectors’ decarbonization efforts, and will inform the efforts of financial institutions as they engage with clients and portfolio companies.