As we close the chapter on 2024, the imperative for the financial sector to spearhead the transition to a more inclusive, resilient, and low-carbon economy has never been clearer. The persistent impacts of climate change, nature loss and pollution and widening social and economic inequalities continue to highlight the urgent need for decisive action and to plug the gap in financing for sustainable development. This year, UNEP FI and its members have risen to these challenges with an impressive array of initiatives, producing 80 research and guidance papers and driving high-level engagement through tools and forums such as the revamped Human Rights Tool and the Forum for Insurance Transition to Net Zero (FIT). Our membership has expanded significantly, now encompassing 553 banks and insurers collectively representing over $125 trillion in assets.
Major highlights of the year included UNEP FI celebrating milestone anniversaries for two of its key initiatives. The Principles for Responsible Banking (PRB) marked its fifth anniversary, now including over 350 members dedicated to aligning their practices with the UN Sustainable Development Goals and the Paris Climate Agreement. This framework has grown significantly, demonstrating the banking sector’s commitment to sustainable finance. Meanwhile, the Net-Zero Asset Owner Alliance (NZAOA) marked its fifth anniversary at New York Climate Week in September.
On the insurance front, in addition to the Principles for Sustainable Insurance (PSI), UNEP FI introduced the Forum for Insurance Transition to Net Zero (FIT) in April, to advance net-zero insurance thinking and practices. FIT serves as a structured dialogue and multistakeholder platform, facilitating voluntary climate action among the insurance industry and key stakeholders.
COP16 and COP 29 further underscored the finance sector’s vital role in translating biodiversity and climate change commitments into tangible outcomes. UNEP FI was instrumental in this effort, releasing a series of publications that provide actionable guidance for financial institutions to support the goals of the Kunming-Montreal Global Biodiversity Framework.
Throughout 2024, UNEP FI and its members have demonstrated a strong commitment to addressing global challenges and advancing sustainable finance, laying the groundwork for a more resilient and inclusive future.
Advancing Global Biodiversity and Climate Goals
UNEP FI unveiled several new initiatives in 2024 to drive the insurance industry’s transition towards sustainability and resilience in the face of climate change. The Forum for Insurance Transition to Net Zero (FIT) created specific guidance for insurance transition plans. In May 2024, UNEP FI launched a PSI Nature-Positive Insurance Working Group consisting of over 40 insurance market participants from around the globe. The working group will act as a platform for advancing progress on embedding nature into the insurance value chain through knowledge sharing and capacity building. To expand its capacity, the V20-Sustainable Insurance Facility (V20-SIF) formed partnerships with third-party organisations that share similar goals and have operations in V20 regions. These partners include the Global Shield Against Climate Change and the Access to Insurance Initiative.
At the end of October, the “People’s COP,” COP16 took over Cali, Colombia, bringing together more than 700,000 participants through the green zone. The conference served as a crucial checkpoint for assessing progress towards the 23 global biodiversity targets and four goals set at COP15. UNEP FI and its partners facilitated over 90 events in the green and blue zones. These included the first Finance and Biodiversity pavilion focused on aligning financial flows with national biodiversity strategies and action plans (NBSAPs).
A significant milestone was achieved by UNEP FI member Banco Davivienda, which, in partnership with the International Finance Corporation (IFC), launched a USD 50 million biodiversity bond aimed at protecting and restoring Colombia’s biodiversity. UNEP FI also launched several key publications, including the Principles for Responsible Banking Sector Action Guidance for Nature, Nature in the Boardroom, From Kunming-Montreal to Cali, and the Finance for Nature Positive Discussion Paper. These resources are designed to help financial institutions integrate biodiversity considerations into their decision-making processes, supporting the goals of the Kunming-Montreal Global Biodiversity Framework, and look at how the financial system has responded to these.
At COP29, UNEP FI demonstrated its leadership in mobilising the financial sector to address urgent climate challenges, showcasing the critical role of finance in achieving the goals of the Paris Agreement. UNEP FI played a leading role in the launch of transformative initiatives aimed at driving action from public, as well as private finance. UNEP FI and partners brought together expertise from thousands of financial practitioners worldwide into a consolidated set of recommendations for the New Collective Quantified Goal (NCQG) which emphasises leveraging public finance to catalyse private investment, particularly in developing economies. Additionally, UNEP FI spearheaded the launch of the Net-Zero Export Credit Agencies Alliance (NZECA) Target-Setting Protocol. This tool offers export credit agencies and export-import banks a practical roadmap to align their portfolios with net-zero goals, further embedding climate action within trade finance systems.
The Net-Zero Banking Alliance (NZBA) has continued to grow in membership since its launch in April 2021, now reaching 145 banks from over 40 countries. The 2024 NZBA Progress Report reveals that four in five banks are on target with all their target-setting commitments, with almost all having set their first round of targets and two-thirds on track with their transition planning. In March 2024, member banks updated their climate commitments by adopting a new version of the Guidelines for Climate Target Setting for Banks, extending the scope of targets to include banks’ capital markets activities.
In May, the Net-Zero Asset Owner Alliance (NZAOA) updated its Governmental Carbon Pricing Position, integrating the latest data on the global effectiveness and coverage of carbon mechanisms. The updated data serves to solidify the Alliance’s call for policymakers to follow through on their Paris Agreement commitments and integrate carbon pricing into their climate policy toolkits. Following the fifth anniversary of NZAOA, its 2024 Progress Report was released, highlighting significant advancements in 1.5°C-aligned decarbonisation. In August, the Alliance published its fourth and most comprehensive Target Setting Protocol, which includes updated membership requirements and detailed guidance on sovereign debt assessment.
Promoting Circular Economies and Pollution Reduction
In April 2024, 160 financial institutions, and as of November 2024, 180 institutions representing USD 17.2 trillion in assets, called on governments to negotiate a treaty to end plastic pollution. The Finance Statement on Plastic Pollution, prepared by UNEP FI with partners such as the Principles for Responsible Investment and CDP, calls for binding rules to address the full plastic lifecycle, scientific basis for policies, and harmonised targets across the plastics value chain. This statement emphasises the link between plastic pollution and climate change, biodiversity loss, and pollution, highlighting the need for systemic solutions.
UNEP FI also launched resources to help banks integrate circular economy principles into climate transition plans. Additionally, UNEP FI partnered with the European Energy Efficiency Financing Coalition to scale up energy efficiency financing in the EU, aligning with the activities of UNEP FI’s members, including PRB signatories and members of the Net-Zero Banking and Net-Zero Asset Owner Alliances.
Strengthening Financial Resilience and Innovation
The Principles for Responsible Banking (PRB) surpassed 350 members in 2024, now representing 54% of global banking assets, and marked its fifth anniversary in September. In October, the PRB launched the Responsible Banking Blueprint, prioritizing human rights, climate, nature, and healthy, inclusive economies, new guidance to inspire banks in their transition to sustainability, signaling where a leading bank could be by 2030 and beyond. The PRB Responsible Banking Blueprint was outlined in an in-depth opinion piece published in Environmental Finance by Eric Usher, Head of UNEP FI. The editorial was a pivotal call to action for banks to operationalise sustainability into their frameworks.
In September, the PRB also released the reports Guidance on Effective Governance and Guidance on Client Engagement.
As a pioneer in impact management, UNEP FI remains committed to guiding its members and the broader financial community in navigating this evolving terrain. Impact management has been integral to the PRB with over 50% of banks globally actively conducting impact analysis guided by UNEP FI’s holistic methodology. In January 2024, UNEP FI updated the Portfolio Impact Analysis Tool for Banks, enhancing its functionality with a modular format that allows greater flexibility for different types of banks. It enables banks to assess their impact across sectors and guide strategic decision-making to set targets and better manage risks while enhancing their sustainability practices. The tool ensures that banks can measure, manage, and improve the environmental and social outcomes of their portfolios, contributing directly to their commitments under the PRB.
In November 2024, UNEP FI presented the revamped Human Rights Toolkit at the 13th United Nations Forum on Business and Human Rights in Geneva, Switzerland. This tool provides practical guidance for banks on developing human rights policies, undertaking due diligence, and creating effective operational grievance mechanisms. The tool will officially launch to UNEP FI members and the public in January 2025, furthering UNEP FI’s commitment to integrating human rights considerations into financial decision-making.
Highlighting Policy Action from Around the Globe
This year, saw a surge in global policy and regulatory reforms, with countries advancing net-zero finance frameworks, highlighted by the launch of the UN Task Force on Net Zero Policy at COP28. UNEP FI launched a new implementation support programme via a webinar series, to help financial sector actors prepare for and meet the requirements of the EU’s Corporate Sustainability Reporting Directive (CSRD) and the corresponding European Sustainability Reporting Standards (ESRS). UNEP FI also co-released a sustainable finance taxonomy framework for Latin America and the Caribbean and contributed to the development of taxonomies in Brazil, Panama, and Costa Rica. UNEP FI partnered with the Climate Bonds Initiative and the Principles for Responsible Investment (PRI) to support global interoperability and implementation of sustainable finance taxonomies and other frameworks. In 2025, further implementation of sector-specific policies, the rollout of emerging economy taxonomies, and greater harmonization across reporting and sustainable finance tools are expected. There will also be a focus on strengthening climate-alignment regulations and integrating nature and biodiversity risks into corporate and prudential frameworks, as well as further engaging members through a new PRB policy track.