Decarbonisation strategy in the financial sector

Financial institutions are embedding climate commitments into their core business strategies, aligning with global frameworks and continuing to meet the targets of the Paris Agreement. These efforts reflect a broader industry shift toward managing climate-related risks and enabling the transition to a low-carbon economy.

Building on this momentum, the Science Based Targets Initiative recently published a new standard for the decarbonisation of financial institutions. In our overview article, we explore the key updates, examine the challenges institutions face on their decarbonisation journey, and share insights into how organisations are approaching this complex transition.

Despite growing ambition, financial institutions operate in a landscape of fragmented regulations and evolving expectations. They must contend with data gaps and attribution challenges in measuring financed emissions, while embedding climate goals into core decision-making demands a fundamental shift in governance. Transparency and credibility are critical to avoid greenwashing and maintain stakeholder trust. 

Drawing on experience across the sector, we highlight practical considerations for addressing these challenges and advancing robust, forward-looking climate strategies.