- Banks that are part of the NZBA vote to approve the updated guidelines
- For the first time, the emissions from banks' financial services will be considered
- The overall ambition and main principles of the original guidelines remain unchanged
Members of the Net-Zero Banking Alliance have decided to update and strengthen their climate pledges by approving a new version of the Guidelines for Climate Target Setting for Banks.
The targets will now cover banks' financial activities, including arranging and underwriting services for issuing new debt and equity instruments, which are a major source of emissions. The new guidelines will also update and clarify technical language to reflect changes in practices, methodologies, and data availability over the past three years.
“NZBA is made up of more than 140 member banks of different sizes and business models operating in various jurisdictions and economies. The threefold increase in our membership since we were established in 2021 demonstrates the significance of climate change to banks operating all over the world. The updated guidelines will support our member banks as they manage climate-related risks and opportunities and support the transition of the real economy,” said Tracey McDermott, Chair of the NZBA Steering Group, and member of Standard Chartered’s management team.
The main ambition and key principles of the original guidelines have been kept. Banks still commit to achieving net zero by 2050 or earlier, setting 2030 targets aligned with the latest science, and covering most carbon-intensive sectors.
Member banks of the NZBA have reviewed the Guidelines since early 2023 ahead of the alliance's three-year anniversary in April 2024. A large number of banks shared their opinions on the updated version, based on their experience with the guidelines and setting climate targets. After consultations, the proposed version was sent to the membership in February 2024 and has now been adopted.
The original Guidelines were released with the launch of NZBA on 21 April 2021, alongside the NZBA Commitment Statement. It states that the guidelines will be reviewed every three years.
“This bank-led update to the Guidelines, and its important addition of facilitated emissions from capital market activities, ensures that current and future NZBA member banks will continue to set targets in line with the most ambitious temperature goals of the Paris Agreement and the latest science,” said Eric Usher, Head of the UN Environment Programme Finance Initiative (UNEP FI). He continued: “Doing so positions these banks to prosper as economies around the world decarbonise and transition towards a cleaner, healthier, and more resilient future.”
