Foundations of Climate Mitigation Target Setting

Year Published

2022

Contributing Organizations

United Nations Environment Programme Finance Initiative (UNEP-FI)

Type of Resource

Guidance

Languages

English

Spanish

Portuguese

Relevant Topics

Core Topic

Target Setting

Topic 2

Climate Policies & Frameworks

Topic 3

Carbon Accounting

Target Audience

Banks

Relevant Geography

Global

Resource Description

This guidance outlines key steps for banks to set credible climate mitigation targets aligned with a 1.5°C pathway. It supports implementation of the Principles for Responsible Banking through a structured approach to financed emissions and portfolio alignment.

Why This Matters

Banks’ financed emissions are around 700 times their operational emissions. Target setting helps align portfolios with climate goals and drive systemic decarbonization.

Key Insights

Presents four stages: understand frameworks, measure and disclose financed emissions, set targets, and implement them
Recommends using science-based tools like PCAF, SBTi, and PACTA and selecting appropriate climate scenarios
Advises setting absolute and intensity-based targets, with baselines, interim milestones, and KPIs
Emphasizes real-economy impact, strong governance, and client and policy engagement

Secondary File Resources

Secondary Resource Link(s)

Foundations for setting climate mitigation objectives

Foundations for setting climate mitigation goals

For advanced target setting: Guidelines for Climate Target Setting for Banks

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