On 21 April 2021, the United Nations Environment Programme Finance Initiative (UNEPFI) published guidelines for climate targets setting for banks.
The guidelines outline key principles to underpin the setting of credible, robust, impactful and ambitious targets in line with achieving the objectives of the Paris Agreement.
The guidelines outline four principles for target-setting:
- Banks shall set and publicly disclose long-term and intermediate targets to support meeting the temperature goals of the Paris Agreement.
- Banks shall establish an emissions baseline and annually measure and report the emissions profile of their lending portfolios and investment activities.
- Banks shall use widely accepted science-based decarbonisation scenarios to set both long-term and intermediate targets that are aligned with the temperature goals of the Paris Agreement.
- Banks shall regularly review targets to ensure consistency with current climate science.
The guidelines also underpin the UN-convened Net-Zero Banking Alliance where banks have committed to a timeline of Net-Zero by 2050. The guidelines will be reviewed at least every three years, and sooner when required.