Net Zero Investment Guidelines
The U.S. Department of the Treasury released net zero investment guidelines to provide financial institutions with more consistent and credible guidance on net-zero investments to reduce the economic impact of climate change.
Since the beginning of this year, more than 100 financial institutions in the United States have made net zero commitments. Net-zero investment guidance focuses on Scope 3 data on greenhouse gas emissions, which is also the type of data that financial institutions have the largest emissions. As a voluntary document, financial institutions can decide for themselves the extent to which the guidance should be applied.
Related Post: IIGCC Launches Net Zero Standards for Banks
Contents of the Net Zero Investment Guidelines
The Net Zero Investment Guidelines are divided into nine articles, namely:
1. Financial institutions’ net zero commitments are committed to reducing greenhouse gas emissions. These commitments are based on the Paris Agreement’s global warming target of 1.5 degrees Celsius. Financial institutions need to develop net zero plans after their net zero commitments.
2. Financial institutions need to consider transition financing, climate solutions, etc. when formulating net zero plans.
3. Financial institutions need to establish credible indicators and provide financing, investment and consulting services based on these indicators.
4. Financial institutions should assess the consistency of their customers and investment portfolios with net zero goals.
5. Financial institutions need to align their customers, investment portfolios and other stakeholders with net zero plans.
6. Financial institutions need to integrate net zero plans into multiple aspects of business operations.
7. Financial institutions need to establish governance processes to oversee the implementation of net zero plans.
8. Financial institutions need to consider environmental impacts in their transformation plans.
9. Financial institutions need to be transparent about the progress of their net zero commitments and plans.
Reference:
Treasury Releases Principles for Net-Zero Financing & Investment
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