The Science-Based Targets initiative (SBTi), which helps many businesses set targets to cut their carbon footprint, has announced it will publish a new paper to set a net zero standard for financial institutions in 2023.
It has stated this paper will provide the clarity needed to the financial sector to hit net zero by 2050.
The SBTi claims that even though financial institutions that manage assets in excess of $130 trillion (£99.8bn) have committed to hitting net zero by 2050, many lack the scientific evidence and help required to get there.
Banks, asset owners, managers and all other institutions within the sector will be covered in the paper – which will focus heavily on offsets, carbon credits and the phase-out of fossil fuels.
The initiative has revealed that 19 financial companies currently have approved science-based targets that align with the aims of the Paris Agreement – including Schroders, La Banque Postale and EQT.
It is calling on more bodies and businesses within the industry to take action and start cutting their carbon emissions.
CEO Dr Luiz Fernando do Amaral, commented: “When it comes to net zero, there is little understanding of what it means for the finance industry.
“Our paper provides the clarity that has been desperately needed and will enable us to develop a net zero standard for financial institutions that will help net zero pledges deliver science-based action.”
GFANZ Vice Chair Mary Schapiro added: “We welcome the efforts of the SBTi in bringing standardisation to the space and providing another resource for financial institutions as they transform their commitments into robust targets.”