The U.S. Department of Treasury published the Principles for Net-Zero Financing & Investment, supporting the mobilization of more private sector capital to address climate change.
The principles outline the emerging best practices for private sector financial institutions in their efforts and commitments to reach net-zero emissions. Treasury Secretary Janet Yellen was scheduled to meet with financial institutions, civil society organizations, and philanthropic leaders to discuss climate-related action by the private sector and how to support efforts.
The department also highlights $340 million in commitments from leading philanthropic organizations to develop research, data availability, and technical resources to help financial institutions develop and execute net-zero commitments. The funding will also help support non-financial sectors of the economy and facilitate planning efforts. Namely, the Bezos Earth Fund, Bloomberg Philanthropies, Climate Arc, ClimateWorks Foundation, Hewlett Foundation, and Sequoia Climate Foundation, pledged $340 million over the next three years.
In addition to the funding announcement, the Glasgow Financial Alliance for Net Zero (GFANZ) announced that 50 U.S. financial institutions will publish net-zero transition plans using frameworks provided by GFANZ and financial sector alliances.
These plans will come out in the next year. Further, the GFANZ Secretariat is conducting a 45-day consultation on its work to define transition finance strategies, as well as support financial institutions in their forecasting of how the strategies impact emission reduction goals. GFANZ plans to have a final report to be released at COP28, also known as the 2023 United Nations Climate Change Conference, and is set to begin Nov. 30, 2023.
Other institutions, including the Rocky Mountain Institute Center for Climate-Aligned Finance, the Partnership for Carbon Accounting Financials, and the Center for Climate and Energy Solutions announced their own plans to support the financial sector’s transition to net-zero emissions, from helping lenders measure and disclose portfolio emissions, training financial industry professionals on greenhouse gas accounting and working with publicly traded companies to gather insights into their net-zero transition plans.
“Over the past year, Treasury engaged with financial market participants, research organizations, civil society organizations, and Tribes, to understand how financial institutions are setting and meeting their net-zero commitments,” the department said in a statement. “These stakeholders noted varied research, guidelines, and voluntary standards about net-zero financing, investment, and advisory services. They also expressed the need for further clarity on where emerging consensus exists and where gaps in best practices remain. Treasury is proud to launch the principles to address this need.”
View the Principles here.