Eric Usher, Head of UNEP FI, the convener of the Net-Zero Banking Alliance (NZBA), and Shargiil Bashir, Chair of the NZBA Steering Group, and Chief Sustainability Officer, First Abu Dhabi Bank (FAB), share their reflections on NZBA’s 2024 Progress Report.
Geneva, 1 October 2024 – The Net-Zero Banking Alliance (NZBA) 2024 Progress Report published today shows that most NZBA banks are taking significant steps towards meeting their climate goals.
When joining NZBA, banks voluntarily commit to independently setting their first targets for reducing emissions associated with their financing activities in carbon-intensive sectors of the economy within 18 months of becoming members. They also commit to developing transition plans within 12 months of setting targets that detail how they will achieve them, and to publishing a full set of sectoral targets covering all or a substantial majority of the carbon-intensive sectors where they have material exposure within 36 months. As of end-May 2024:
- 97% of the 122 banks due to have set their first sectoral targets have done so
- Nearly two-thirds of the 91 banks due to publish transition plans have done so, with 25% more expected by year-end
- Around four-fifths of the 50 banks due to publish a full set of targets have done so
These are visible signs of a transformative shift that has taken place over the past three years as banks position themselves to understand and finance the transition to net zero.
The report also points to areas in need of additional attention and support. Setting decarbonisation targets for banks remains a challenging exercise due to the quality of client greenhouse gas emissions data, unclear decarbonisation pathways, and a lack of a supportive policy environment. Of the one-fifth of banks that have not met the milestone to set targets covering all or a substantial majority of carbon-intensive sectors, almost all were from emerging markets, where these challenges are particularly acute.
Insights drawn from this latest progress report will inform the support that NZBA will provide to members as they develop their individual and independent targets over the coming year, in particular its work with emerging market banks that are progressing towards meeting their commitments but need more time to meet milestones.
NZBA membership has reached 144 banks and a further twenty-three of them are expected to set targets and publish their individual transition plans by the end of 2025. After members voted to reinforce and update the NZBA target setting guidelines earlier this year, NZBA banks with significant capital markets activities are due to update their targets to include emissions associated with this part of their businesses by November 2025.
Download the full report | Download the executive summary