- The first progress report delivered by the NZBA since its launch in April 2021 aggregates the intermediate 2030 targets set by over 60 members of the Alliance and reiterates its requests for support from policymakers in helping deliver an orderly and ‘whole economy’ transition to net zero.
- The targets are meaningful and science-based: the targets prioritise areas of the member’s most carbon intensive business or their most significant financial exposures and must be achieved by 2030.
- The majority (90%) of the 43 banks that were due to publish targets by the end of October have done so and 19 additional members set and delivered their first targets well in advance of their 18-month deadline. Over half of the Alliance has now set intermediate decarbonisation targets.
Geneva, 09 November 2022 – On Finance Day at COP27, the industry-led, UN-convened Net-Zero Banking Alliance published its first Progress Report. This report, which details the intermediate 2030 decarbonisation targets from over 60 member banks, demonstrates the first stage of progress since the Alliance launched in April 2021. The publication also shares the Alliance’s wider vision for creating a predictable and enabling policy environment to accelerate the net-zero transition.
The progress report captures an aggregated assessment of founding Alliance members’ delivery on their ambitious commitment. “In many ways, we are all in uncharted territory, refashioning the tools of our trade to address the monumental task at hand,” notes Alliance chair Tracey McDermott in the report’s foreword. “New methodologies must be developed, new risk models built, there are significant gaps in the availability and consistency of climate data.” Nevertheless, the Alliance has achieved a significant milestone: the majority (90%) of the 43 banks that were due to publish targets by the end of October 2022 have done so, and 19 additional members set and delivered their first targets well in advance of their 18-month deadline. The progress report shows members’ first decarbonisation efforts focusing on the highly emitting sectors of power generation, oil & gas, and coal.
“Very rarely is a first attempt perfect. But this report demonstrates exceptional progress for the Alliance and for the global banking industry,” said UNEP FI head, Eric Usher. “Much of the 60% of the global banking industry outside the Alliance has made little effort to decarbonise. But with over half of its members having now set intermediate targets, the Alliance is blazing a trail for other banks to follow and has built a clear roadmap for governments to leverage in creating policies that will support a more sustainable financial system.”
In just one and a half years, the Alliance has nearly tripled in size: from 43 founding members, it now convenes 122 member banks from 41 countries. As per the Alliance’s Commitment Statement and accompanying Guidelines for Climate Target Setting for Banks, members have 18 months from joining the Alliance to formulate and declare their first set of intermediate decarbonisation targets. These targets should prioritise areas of the member’s business based on GHG emissions, GHG intensities and/or financial exposure in their portfolio, must align with no/low-overshoot 1.5°C transition pathways, as specified by credible science-based climate scenarios, and must be achieved by 2030.
In addition to targets, the report details the Alliance’s efforts to support members’ target setting and implementation efforts. These include the publication of the Supporting Notes on the Guidelines in July 2022, and the Transition Finance Guide in October 2022. Through these publications, the Alliance seeks to support and accelerate members’ decarbonisation journeys.
The new report also shares the Alliance’s wider vision for creating a predictable and enabling policy environment to accelerate the net-zero transition. As COP27 brings together leaders and experts from around the world, the Alliance reiterates its requests for support from policymakers in creating a supportive regulatory environment that will facilitate an orderly and ‘whole economy’ transition to net zero. In particular, Alliance members urgently call on governments to meet them in committing to the Paris Agreement’s target of 1.5°C. The Alliance provides a clear signal that private finance is ready to bolster government action and can support individuals and businesses in achieving their part in the transition, but governments must take a leadership role in achieving the net-zero transition.