‘Climate Target Setting for Automotive Sector Financing’ is the second in a series of publications developed by members of the Net-Zero Banking Alliance (NZBA) with the goal of assisting banks by outlining the choices they make when setting climate-related targets for financing in several sectors of the real economy. This report includes key considerations in relation to the scope, portfolio metrics, data, and scenarios, emerging practices, common challenges and policy, data, and other gaps.
This paper sets out the design choices relevant for banks setting targets to reduce Scope 1, 2, and 3 emissions associated with their financing for vehicle manufacturer and original equipment manufacturer (OEM) clients. It focuses on this part of the automotive value chain because decisions on vehicle design made by vehicle manufacturers and OEMs have an outsized impact on the lifecycle emissions of a vehicle. It does not prescribe any particular methodology for banks to use or impose any requirements on NZBA member banks over and above the ones they chose to commit to when becoming a signatory.