Net Zero and ESG
Net zero represents a dynamic balance of carbon dioxide emissions and absorption and is the climate goal for many jurisdictions by 2050. To slow global warming, the financial industry needs to play a role in net zero financing.
The Glasgow Net Zero Financial Alliance is the world’s largest net zero organization. It includes multiple net zero alliances in the banking, insurance and asset management industries. It aims to encourage the financial industry to provide the necessary financing for companies’ net zero transition.
Global Net Zero Development
The global net zero development has gone through three stages. The first stage is the recognition of the important role of carbon emissions in climate policies, and the unified conversion of greenhouse gases into carbon emissions through global warming potential (GWP).
The second stage is when major countries, regions, cities, and companies begin to set net zero targets. The Paris Agreement has become the basis for many contracting parties to set net zero targets.
The third stage is the implementation phase of the net zero target, and how to effectively formulate, implement, and evaluate net zero is a key concern for regulatory agencies, enterprises, investors, and other stakeholders. The International Organization for Standardization (ISO) plans to develop the first net zero international standard to provide measurement standards.
Net Zero and Transition
From a broad perspective, net zero and transition are usually used simultaneously. However, some industries may not be able to achieve net zero or incur additional costs due to industry limitations, and these industries are referred to as brown industries. Reducing carbon emissions in these industries is crucial for achieving the global net zero, and transition specifically refers to the actions of these industries.
The financial industry plays an important role in the transition of brown industries. Some international organizations, such as the Climate Bond Initiative (CBI), provide classification systems and assessment guidelines for corporate transition to help financial institutions identify and evaluate corporate transition plans.
Transition Plan Taskforce Releases Final Disclosure Guidance
The Transition Plan Taskforce (TPT) has released final disclosure guidance
U.S. Treasury Releases Net Zero Investment Guidelines
The U.S. Department of the Treasury released net zero investment guidelines
TPI Releases Net Zero Transition Report for Banking Industry
The Transition Pathway Initiative (TPI) released a net zero transition report, analyzing the net-zero transition process of the world’s 26 largest banks
CFA Institute Lists Sustainable Finance as a Development Direction
CFA Institute Lists Sustainable Finance as a Development Direction
Hong Kong Monetary Authority Releases Net Zero Plan
Net Zero Plan for Banking The Hong Kong Monetary Authority (HKMA) releases the Net Zero plan for the banking industry, which aims to assist banks
World Economic Forum Releases Global Energy Transition Report
The World Economic Forum (WEF) released the Global Energy Transition Report
CDP Releases Corporate Decarbonization Report
The international research organization CDP (Carbon Disclosure Project) released a corporate decarbonization report
International Maritime Organization Releases Greenhouse Gas Reduction Strategy
The International Maritime Organization (IMO) has released a greenhouse gas reduction strategy, aiming to achieve net zero emissions by 2050
IIGCC Launches Net Zero Standards for Banks
The Institutional Investors Group on Climate Change (IIGCC) and the Transition Pathway Initiative Global Climate Transition Centre (TPI) have released net zero standards for banks to help it achieve climate goals and assist investors in measuring net zero transition
Amundi Launches Net Zero Strategy ESG Funds
International asset management company Amundi has announced the launch of a series of net zero strategy ESG funds, aimed at investing in companies that have performed well in low-carbon transition and striving to achieve the global net zero emissions target by 2050