Legal & Regulatory News

GFANZ releases final report on financial institution net-zero transition plans

On 1 November 2022, the Glasgow Financial Alliance for Net Zero (GFANZ) published their final report on 'Financial Institution Net-zero Transition Plans' (the Report), with the aim of accelerating adoption of current best practices and promoting consistency in the development and use of transition plans across the financial sector.

Within the Report, GFANZ identify four key areas in which the finance sector can help to enable the transition including:

• financing existing or new climate solutions;
• financing entities that are already aligned to a 1.5 degree C pathway;
• financing entities committed to transitioning in line with 1.5 degrees C aligned-pathways; and
• financing the accelerated managed phaseout or high-emitting physical assets.
• In addition, the Report introduces ten components, under five headings, for financial institutions to create credible transition plans, including:
• defining the organisation's objectives and priorities for reaching net-zero;
• creating an implementation strategy;
• creating an engagement strategy;
• establishing a suite of metrics and targets to drive execution of the net-zero transition plan and monitor progress of results in the near, medium and long term; and
• creating a governance strategy, including defining roles and responsibilities for the strategy oversight body and senior management teams as well as providing training and development to support the implementation of the plan.

Click here to view the Report.