09.19.23

Financiers' 'Net Zero' Pledges Must Align With Temperature Limits: U.S. Treasury

by: David Lawder

The U.S. Department of the Treasury said that "net-zero" financing commitments from banks and asset managers should align with goals to limit the global average temperature increase to 1.5 degrees Celsius and be backed by "credible" metrics and targets. The Treasury released nine new principles that aim to promote consistency, credibility and transparency across net-zero pledges by financial institutions. Among them, the Treasury prescribed that financial institutions should practice "transition finance" that can support decarbonization in high-emitting sectors that are difficult to abate. This includes providing financing, investment or advisory services to support "a managed and accelerated transition from high-emitting to zero- or near-zero-emissions assets."

Read the full article on Reuters