SBTi Seeks Expert Feedback on Financial Institutions Net-Zero Standard Draft

The Science Based Targets initiative called in September 2024 for finance sector practitioners, academics and civil society experts to submit feedback on the draft Financial Institutions Net-Zero Standard before the survey closed on 11 October 2024. The standard is designed to enable banks, insurers, investors and asset managers to set science-based net-zero targets across their full range of financial activities.

The draft Financial Institutions Net-Zero Standard, published in July 2024, covers criteria and recommendations across five main areas: entity-level commitments and leadership, identification and measurement of portfolio emissions, portfolio climate alignment targets, emissions-intensive sector targets, and reporting requirements. The standard extends beyond the existing Financial Institutions Near-Term Criteria by including long-term net-zero target setting and expanding coverage to insurance underwriting and capital market activities, in addition to lending and investment.

The SBTi hosted a webinar on 22 August 2024 to walk stakeholders through the draft standard and the development process, with a recording made available for those unable to attend. The initiative emphasised that partial survey responses covering only select sections are still valuable to the technical review team. Financial institutions are encouraged to begin setting near-term targets under the existing FINT V2 criteria now, with the expectation that they will be able to upgrade those targets once the final FINZ Standard is published in 2025.

Publication of the final Financial Institutions Net-Zero Standard in 2025 would give global banks, insurers and asset managers a comprehensive framework for aligning both near- and long-term portfolio activities with a 1.5 degrees Celsius pathway. For Indian financial institutions, including public sector banks and insurance companies, the standard is expected to become a reference point as regulators and investors increase expectations around climate-related financial disclosures and transition planning. Queries about the consultation process can be directed to the SBTi finance team at [email protected].

Key figure — Draft FINZ Standard published July 2024; final version expected in 2025