On Finance Day at COP28, the industry-led, UN-convened Net-Zero Banking Alliance published this Progress Update.
The Net-Zero Banking Alliance provides an in-depth analysis of NZBA members’ progress on target-setting and delivery against their targets every two years in the form of a progress report. The last progress report compiled by the Alliance was published in November 2022; the next such report will be published in Summer 2024 after NZBA’s founding member banks are due to have set targets for all their highest emitting sectors.
NZBA chose to publish this ‘progress update’ on the actions taken by banks on climate target setting in the last year as a contribution to the wider Global Stocktake taking place this year for the 2023 United Nations climate change conference, COP 28. It does not include the in-depth analysis of a progress report but provides a stocktake of any new targets set by Alliance members and summarises relevant developments in climate-related voluntary frameworks and mandatory regulation. Some key messages from the report follow below.
Membership growth and target setting progress
- Banks’ commitment to net zero continues to grow and to spread. NZBA membership has tripled in number since its launch and banks from emerging markets now make up over a third of its membership.
- Over two thirds of NZBA banks have now set targets aligned with 1.5°C scenarios. This represents significant progress. In April 2021 when NZBA launched, no bank had set a science-based sectoral 2030 target using 1.5°C scenarios that included financed emissions.
- Member banks continue to focus on the most carbon-intensive sectors. 76% of banks that had set targets as of 30 September 2023 had done so for the power generation sector. The share of banks setting targets for iron and steel, and for cement grew from 18% to 23%, for oil and gas it rose from 51% to 57%, and went from 38% to 45% for real estate between September 2022 and September 2023.
- Almost nine in ten NZBA banks met their commitment to set their first round of targets within 18-months of signing the commitment and others are on track to do so in the coming months.