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Emerging Practice: Climate Target Setting for Automotive Sector Financing

Emerging Practice: Climate Target Setting for Automotive Sector Financing

Year Published

2024

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
Transport
Topic 2
Target Setting
Topic 3
Banking

Target Audience

Banks

Relevant Geography

Global
Emerging Practice: Climate Target Setting for Automotive Sector Financing

Resource Description

This resource outlines emerging practices for setting climate targets in financing passenger and light commercial vehicles. Based on NZBA member bank experiences, it provides guidance on methodologies, metrics, and data to support net-zero alignment.

Why This Matters

With transport a major emissions source, this resource helps financial institutions align vehicle financing with science-based decarbonization pathways.

Key Insights

  • Recommends intensity-based targets using metrics like gCO₂/km or gCO₂/pkm, covering tailpipe (Scope 1) and upstream (Scope 3) emissions
  • Supports using IEA scenarios and tools such as PACTA and SBTi FLAG for scenario analysis and target-setting
  • Identifies challenges including data gaps, vehicle segmentation, and regional variations in emissions standards
  • Advises considering well-to-wheel emissions and adapting targets to market and policy contexts
  • Stresses the role of governance, institutional alignment, and client engagement in implementation

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