On 1 October 2024, the United Nations Environment Programme Finance Initiative (UNEP FI) published the Net-Zero Banking Alliance (NZBA) 2024 Progress Report, which concludes that most NZBA banks are taking significant steps towards meeting their climate goals.

Banks voluntarily commit, when joining NZBA, to:

• Independently setting their first targets for reducing emissions associated with their financing activities in carbon-intensive sectors of the economy within 18 months of becoming members.
• Developing transition plans within 12 months of setting targets that detail how they will achieve them.
• Publishing a full set of sectoral targets covering all or a substantial majority of the carbon-intensive sectors where they have material exposure within 36 months. 

The report shows that, as of the end of May 2024, 97% of the 122 banks due to have set their first sectoral targets had done so; nearly two-thirds of the 91 banks due to publish transition plans had done so, with 25% more expected by year-end; and around four-fifths of the 50 banks due to publish a full set of targets had done so. UNEP FI notes that there 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.

The report also highlights areas in need of additional attention and support, including setting decarbonisation targets for banks which remains a challenging exercise due to the quality of client greenhouse gas emissions data, unclear decarbonisation pathways, and a lack of a supportive policy environment. These challenges are particularly acute in emerging markets.

Insights drawn from the latest progress report are intended to inform the support that NZBA will provide to members as they develop their individual and independent targets over the coming year, in particular its work with emerging market banks that are progressing towards meeting their commitments but need more time to meet milestones.