Financial Institutions Net-Zero Transition Plans: Fundamentals, Recommendations, and Guidance

Year Published

2022

Contributing Organizations

Glasgow Financial Alliance for Net Zero (GFANZ)

Type of Resource

Guidance

Framework

Languages

English

Korean

Japanese

Chinese

Relevant Topics

Core Topic

Transition Plans

Topic 2

Disclosure Standards - Voluntary

Topic 3

Transition Finance

Target Audience

All

Relevant Geography

Global

Resource Description

This voluntary framework from GFANZ provides guidance for financial institutions to develop credible net-zero transition plans. It promotes comparability and outlines common elements of effective plans, serving as a global resource to support the implementation of net-zero commitments without overriding existing requirements.

Why This Matters

Financial institutions play a critical role in enabling real-economy decarbonization. This framework helps ensure that transition plans are consistent, credible, and aligned with global climate goals, supporting transparency, comparability, and effective climate action across the financial system.

Key Insights

Identifies five key components of a transition plan: (1) objectives and priorities, (2) implementation strategy, (3) engagement strategy, (4) metrics and targets, and (5) governance
Emphasizes aligning financing activities with 15°C goals and decarbonization pathways
Encourages institutions to disclose their use of transition finance, emissions targets, and strategies to manage high-emitting sectors
Recognizes regional and institutional differences and does not prescribe a one-size-fits-all approach
Aims to support consideration of evolving regulatory expectations and voluntary initiatives like the ISSB and TCFD