Banks make significant strides in net-zero commitments, but challenges persist

illuminem summarizes for you the essential news of the day. Read the full piece on UNEP FI or enjoy below:

🗞️ Driving the news: The Net-Zero Banking Alliance (NZBA) 2024 Progress Report reveals substantial progress by member banks towards climate targets, with 97% setting their first sectoral targets
• Despite significant strides, challenges remain, particularly in data quality and support for emerging markets
Membership has now reached 144 banks, with more targets and transition plans expected by the end of 2025

🔭 The context: Banks in the NZBA commit to reducing emissions tied to their financing activities, focusing on carbon-intensive sectors
• They set targets within 18 months of joining and develop transition plans within 12 months
• However, banks in emerging markets face additional hurdles, such as limited access to quality data and unclear policy frameworks

🌍 Why it matters for the planet: As financial institutions align with net-zero goals, their ability to guide investments toward low-carbon solutions is critical for achieving global climate targets and facilitating the energy transition

⏭️ What's next: NZBA will focus on supporting emerging market banks in setting and meeting decarbonization targets, while member banks with significant capital market activities will include emissions from this part of their business by 2025

💬 One quote: "These are visible signs of a transformative shift that has taken place over the past three years as banks position themselves to understand and finance the transition to net zero," said Eric Usher, Head of UNEP FI

📈 One stat: 97% of the 122 banks due to set their first sectoral targets have successfully done so

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