Guidelines
Guidelines for Climate Target Setting for Banks – Version 2

Published March 2024

The original version of the Guidelines for Climate Target Setting for Banks, published to coincide with the launch of the Net-Zero Banking Alliance in April 2021 states that the guidelines, ‘…will be reviewed at least every three years.’ To meet this commitment, NZBA banks led a review of the original version of the guidelines from early 2023. A large number of member banks shared their views on what an updated version might look like, informed by their experience of applying the guidelines, setting and implementing climate targets, and financing transitions in different sectors. Based on these consultations, NZBA developed a new proposed version which the membership voted to adopt in March 2024.

The new version reflects changes in science, regulation, data, and methodologies that took place in the three years since the original version was published. It reinforces the guidelines, further outlining key principles to underpin the setting of credible and ambitious targets in line with achieving the objectives of the Paris Agreement. The updated version of the guidelines will apply to all new targets and any new iterations of existing targets set after 22 April 2024.

Download the report here
NZBA Progress Reports and Updates
Net-Zero Banking Alliance 2023 Progress Update

Published December 2023

On Finance Day at COP28, the industry-led, UN-convened Net-Zero Banking Alliance published a Progress Update. This report provides a stocktake of new targets set by Alliance members, highlights a selection of green financing case studies from NZBA banks that showcase the large and growing opportunities across different sectors and asset classes, and summarises relevant developments in climate-related voluntary frameworks and mandatory regulation.

Download the report here
Net-Zero Banking Alliance 2022 Progress Report

Published November 2022

On Finance Day at COP27, the industry-led, UN-convened Net-Zero Banking Alliance launched its first Progress Report. This report details the intermediate 2030 decarbonisation targets from over 60 member banks, with promising indicators of early progress in target setting. The publication also shares the Alliance’s wider vision for creating a predictable and enabling policy environment to accelerate the net-zero transition.

Download the report here
NZBA Resources

The Net-Zero Banking Alliance’s three work tracks support and accelerate banks’ net-zero transition by creating implementation guidance, aiding improved target setting, and outlining sectoral approaches as appropriate. The research and guidance papers provided below were generated by the Alliance Work Tracks to equip members with the necessary tools for rapid change.

Climate Target Setting for Automotive Sector Financing

Published February 2024

The second in a series of publications developed by NZBA members to assist banks setting climate-related targets for financing in several sectors of the real economy, this paper sets out the design choices relevant for banks setting targets to reduce Scope 1, 2, and 3 emissions associated with their financing for vehicle manufacturer and original equipment manufacturer (OEM) clients. It focuses on this part of the automotive value chain because decisions on vehicle design made by vehicle manufacturers and OEMs have an outsized impact on the lifecycle emissions of a vehicle. This report includes key considerations in relation to the scope, portfolio metrics, data, and scenarios, emerging practices, common challenges and policy, data, and other gaps. It does not prescribe any particular methodology for banks to use or impose any requirements on NZBA member banks over and above the ones they chose to commit to when becoming a signatory.

Download the report here
Climate Target Setting for Real Estate Sector Financing

Published December 2023

The first in a series developed by NZBA members to assist banks setting climate-related financing targets in particular sectors of the real economy, this publication outlines key considerations in relation to scope, portfolio metrics, data, and scenarios, emerging practices, common challenges and policy, data, and other gaps for banks setting decarbonisation targets for their residential and commercial real estate financing. It does not prescribe any particular methodology for banks to use or impose any requirements on NZBA member banks over and above the ones they chose to commit to when becoming a signatory.

Download the report here
Developing Metrics for Transition Finance

Published December 2023

Banks’ strategies for managing climate impact have matured, with banks moving from exclusionary policies and targeted sustainable finance to more wide-ranging engagement with clients, especially large corporates. This engagement is helping to encourage companies to set transition plans and to accelerate those plans which, in turn, will support banks’ net-zero strategies if banks have existing exposures to these clients. Financing provided to clients under such engagements is frequently described as “Transition Finance”. This paper discusses how banks may consider reporting their Transition Finance efforts. We see a need for additional specific metrics, as existing metrics may fail to provide a full picture of banks’ approaches to decarbonising their portfolios.

Download the report here
Supporting Note: The Use of Carbon Credits in Climate Target Setting

Published September 2023
To support member banks in developing targets, the Net-Zero Banking Alliance (NZBA) has developed this short paper to provide clarification on the already-published Guidelines for Climate Target Setting for Banks outlining how it views the treatment of offsetting in relation to member commitments. The Alliance expects that any carbon credits utilised are consistent with the sectoral decarbonisation pathway of a selected climate scenario. Only carbon credits for which clients or the bank have provided evidence that they meet overall quality principles are considered eligible. Any inclusion of client-attributed carbon credits should be reported by the banks.

Download the report here
Transition Finance Case Studies

Published January 2023
To support Net-Zero Banking Alliance (NZBA) member banks in developing transition plans, the Alliance asked five NZBA member banks to share their approaches. This short paper shares insights from First Abu Dhabi Bank, Intesa Sanpaolo, La Bank Postale, SMBC, and Swedbank on how they define transition finance, the related goals they have and how they are translated into targets, and how these new approaches have been socialised and integrated within their organisations.

Download the report here
NZBA Transition Finance Guide

Published October 2022
Over the coming decades, banks will be called on to finance a radical and rapid transition of the global real economy, from a high volume of high-emitting activities towards a mix of lower-emissions activities which are holistically aligned with ‘net zero by 2050’ pathways. This Transition Finance Guide was created by the Financing & Engagement sub-track of the NZBA’s industry-led Implementation Work Track, and provides guidance to Alliance members and the banking industry for assessing opportunities, allocating effort, and advocating for supportive policies regarding transition finance for the real economy.

Download the report here
NZBA Member Banks’ Green Financing Case Studies

The Net-Zero Banking Alliance’s three work tracks support and accelerate banks’ net-zero transition by creating implementation guidance, aiding improved target setting, and outlining sectoral approaches as appropriate. The research and guidance papers provided below were generated by the Alliance Work Tracks to equip members with the necessary tools for rapid change.

Blended finance case studies

Published December 2023
Public finance alone cannot provide the investment needed for the global economy to move towards and achieve net zero. Policy, projects, and financing solutions are needed to mobilise private capital. Here NZBA highlights recent case studies from member banks where the blending of public and private finance was key to their success. Read the case studies here.

Green financing in energy and industry

Published December 2023

The transition to net zero in energy and industry is a huge business opportunity for banks. Annual clean energy investments to meet growing energy demand in emerging and developing economies alone will represent an annual investment opportunity of as much as USD 2.8 trillion by the early 2030s. Here NZBA brings together recent examples of financing provided or facilitated by member banks in these key sectors in developed and emerging economies. Read the case studies here.

Green financing in transport

Published December 2023
The transition to zero-carbon transport is well underway. Global spending on electric cars increased by 50% in 2022 compared to 2021, reaching around USD 425 billion. Banks are playing an important role in financing established and earlier-stage technologies. Here NZBA gathers recent examples of financing provided or facilitated by member banks in these key sectors in developed and emerging economies. Read the case studies here.
Partner and Supporter Resources

The Net Zero Banking Alliance seeks to support its members with information from trusted partners and supporters that will aid their transition to net zero. Below is a continuously-updated collection of expert research, peer examples, and best practices from NZBA’s partners, supporters, and members.

Mind the delivery gap: Achieving net zero through finance and policy

Published October 2022.
This report from our partners at UK Bankers for Net Zero explores the significant gaps between banks’ decarbonisation ambitions and what they need to achieve under the Net Zero Banking Alliance commitment, specifically for SMEs and retrofits. Banks stand ready to mobilise resources and expertise to help decarbonise the real economy. However, a quid pro quo needs to be recognised if banking’s potential is to be fully realised– policymakers must address the substantial policy blockers that exist across these two key areas.
How to align with the Paris Agreement – A Resource Note for Banking Associations and Banks

Published June 2022.
This paper provides further insights into how banking associations, along with their members, can align with the Paris Agreement by formulating joint objectives through commitments and opportunities for collaboration. Following the important work of UNEP FI in providing clear guidance, this paper contends that banking associations or a group of frontrunner banks can pave the way for smaller institutions by setting up national commitments and can provide a platform to engage with the government on challenges and obstacles.
The Good Transition Plan

Published November 2021.
The Climate Safe Lending Network published The Good Transition Plan as a practical, actionable guide for banks to create effective climate transition plans. The Good Transition Plan gathers the best thinking, emerging best practices, and stakeholder expectations from over 100 climate-finance experts and professionals from around the world. It presents a structured approach to net-zero planning, with practical insights from sustainable finance leaders, including bankers, investors, policymakers, civil society organizations, and academics.
Sustainable Markets Initiative: Net Zero Practitioner’s Guide

Published 20 October 2021.
The Prince of Wales’ Financial Services Task Force (FSTF) Net Zero Practitioner’s Guide is designed to support the implementation of banks’ net zero commitments and meet the growing need for specificity. Focusing on client emissions related to bank financing, as opposed to banks’ own operational emissions, the FSTF Guide is designed to help banks deliver on the critical role they must play in actively supporting their clients to transition.
Podcast: Green Conversations – Chartered Banker Institute & NZBA

Released 19 October 2021.
Hosted by Simon Thompson, Chief Executive of The Chartered Banker Institute and author of Green and Sustainable Finance: Principles and Practice.    Simon is joined by our first Guest in our Green Conversations podcast series – Sarah Kemmitt, a consultant to UNEP FI, working with the Net Zero Asset Owner and Net Zero Banking Alliances.  With a background in environmental science, Sarah’s early career focussed on habitat conservation and research into carbon and nitrogen cycling in agroecosystems.  Following the financial crisis, Sarah took the opportunity to move into banking regulation and internal audit. In recent years she combined these career paths, contributing to the Bank of England’s work on the regulation and supervision of climate risks.
GFANZ: Policy Call-to-Action

Published 11 October 2021.
In this Call to Action, the global financial services industry calls on G20 governments to help build a net-zero economy and meet the goals of the Paris Agreement ahead of COP 26. It includes specific policy requests across 5 topics and was published by the Glasgow Financial Alliance for Net Zero (GFANZ) – of which the Net Zero Banking Alliance is the banking element – and is endorsed by the GFANZ CEO Principals Group.
WWF: Net Zero: An introductory guide for financial institutions

Published July 2021.
Leadership in the field of sustainable finance is increasing in ambition and robustness, and the level of ambition is ratcheting up to reflect the urgency of the need to shift capital and align portfolios. This guide looks to support financial institutions in navigating the technical questions they may ask themselves when assessing their portfolio for alignment with a Net Zero scenario and answer some of the key technical challenges which will support the implementation of robust, science-based strategies.

 

The resources on this page are being provided as a convenience and for informational purposes only; they do not necessarily constitute an endorsement or an approval by the Net Zero Banking Alliance or any of its member organisations. UNEP FI and the Net Zero Banking Alliance bears no responsibility for the accuracy, legality or content of the documents provided by external sources.