Developing Metrics for Transition Finance

Year Published

2023

Contributing Organizations

Net Zero Banking Alliance (NZBA)

United Nations Environment Programme Finance Initiative (UNEP-FI)

Type of Resource

Research/Insights Report

Languages

English

Relevant Topics

Core Topic

Transition Finance

Topic 2

Climate Reporting

Topic 3

Carbon Accounting

Target Audience

Banks

Relevant Geography

Global

Resource Description

This resource proposes a framework for banks to report transition finance—capital provided to high-emitting companies with credible decarbonization plans. It offers metrics to improve transparency alongside existing sustainable finance and emissions targets.

Why This Matters

Current metrics overlook banks’ role in enabling real-economy decarbonization. These proposals help capture and communicate that contribution more effectively.

Key Insights

Suggests input (finance volume), output (emissions reduction), and supporting (physical indicators) metrics
Uses GFANZ’s four financing strategies: climate solutions, aligned, aligning, and managed phaseout
Addresses conflicts between financing transition and meeting emissions targets, recommending separate reporting and structured approaches
Encourages banks to collect client transition data, classify financing, and track outcomes over time
Includes sector-level physical metrics, eg green steel or renewable energy output

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