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.
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
Monetary Authority of Singapore Releases Net Zero Plan for Financial Industry
MAS Announces Net Zero Plan for Financial Industry The Monetary Authority of Singapore (MAS) announced the launch of the Net Zero plan in the financial
Institutional Investors Releases Net Zero Transition Guidelines
Institutional Investors Group on Climate Change (IIGCC) has issued a guidance on net zero transition for enterprises, aiming to provide enterprises with practical carbon emission reduction measures and provide long-term stable returns based on meeting the 1.5-degree Celsius target of the Paris Agreement
CDP Releases Net-Zero Report for China Listed Companies
Carbon Disclosure Project (CDP) releases the net-zero report of listed companies in China. CDP analyzes the development of 70 companies listed in China and Hong Kong through questionnaires and interviews, and proposes the difficulties and solutions in net-zero transition