The Institutional Investors Group on Climate Change (IIGCC) has launched a new net-zero standard for banks, outlining investor expectations on the transition to net-zero within the sector.
In the June 5 announcement, IIGCC revealed it had teamed up with the Transition Pathway Initiative Global Climate Transition Centre (TPI Centre) to build the new standard around 10 key areas, including bank commitments, targets, and emissions disclosure, among others.
“The standard is intended to support constructive engagement with banks to aid ongoing implementation of climate commitments,” IIGCC said.
Alongside the standard, the TPI Centre has launched a net-zero banking assessment framework which provides indicators and scoring guidance for assessing the alignment of banks against the goals of the Paris Agreement.
The TPI Centre is planning to use the new framework to assess “26 global banks across Europe, North America, and Asia, annually,” with the first round of assessments due in the coming months.
The standard is intended to support constructive engagements between shareholders and financial services companies on how they are supporting the net-zero transition and allow for easy scoring on various criteria and peer comparison.
“Due to the nature of their activities, banks have an outsized role to play in whether the global economy successfully decarbonizes or not,” Stephanie Pfeifer, CEO of IIGCC said, adding that the new standard will help investors to “assess how prepared banks are for the transition and to shape their engagement strategies accordingly.”
So far this year, the 37 climate change-related shareholder proposals subject to a vote at financial services companies globally have won 16.8% average support, compared to 33.3% throughout 2022, according to Insightia’s Voting module.