Net-Zero Banking Alliance Transition Finance Guide

Year Published

2022

Contributing Organizations

United Nations Environment Programme Finance Initiative (UNEP-FI)

Type of Resource

Guidance

Languages

English

Relevant Topics

Core Topic

Transition Finance

Topic 2

Banking

Topic 3

Insurance

Target Audience

Banks

Insurers

Financial Services Providers

Relevant Geography

Global

Resource Description

This guide outlines how banks can use transition finance to support client decarbonization and an orderly net zero transition, focusing on engagement rather than divestment.

Why This Matters

Transition finance enables banks to cut real economy emissions while managing risks and supporting a just net zero shift.

Key Insights

Defines four financing approaches: climate solutions, aligned clients, aligning clients with credible plans, and managed phaseout of high-emitting assets
Stresses the need for credible client transition plans with clear targets, governance, and KPIs
Notes challenges such as inconsistent standards, data gaps, and reputational risks from short-term emissions increases
Urges banks to develop internal frameworks, disclose transition plans, and work with policymakers to align incentives

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