Frequently Asked Questions

Reducing greenhouse gas (GHG) emissions is a critical issue, which will require action across public and private sectors. Financial institutions have an important role to play, including in the measurement, disclosure and reduction of their Scope 3 category 15 emissions.

One of the Net-Zero Banking Alliance’s (NZBA) primary catalysts for achieving the net-zero transition is the target setting process embedded within its central Signatory Statement. In signing the NZBA Signatory Statement, banks agree to set targets that are:

• Ambitious: targets should be near-term and align with the goals of the Paris Agreement, aiming to limit global warming to well below 2°C, striving for 1.5°C
• Science-based: targets should follow widely accepted science-based decarbonization scenarios that are aligned with ​​​a net-zero goal and ​​the​ goal​s of the Paris Agreement

The NZBA Signatory Statement and Guidance recommend that banks set 2030 (or five years in the future, whichever is later) and 2050 (or sooner) net-zero targets that align with widely accepted science-based decarbonization scenarios for meeting a net-zero target and the goals of the Paris Agreement. This includes all key sectors involved in extracting and supplying fossil fuels (coal mining, oil & gas) as well as most key sectors involved in demanding and consuming fossil fuel energy (power generation, transport, real estate, cement, steel, aluminium, etc.).

• 18-month targets: the first round of targets should be set within 18 months of signing the NZBA commitment. These targets should prioritise those sectors that represent the bank’s largest greenhouse gas (GHG) emissions and GHG emission intensities.
• 36-month targets: It is recommended that initial priority targets set within 18 months of signing the NZBA Signatory Statement should be followed, within 36 months of signing, by a suite of decarbonisation targets that cover a significant majority of a bank’s total financed emissions and cover nine priority sectors (agriculture, aluminium, cement, coal, commercial and residential real estate, iron and steel, oil and gas, power generation, and transport). These targets should be set for 2030 at the latest (or five years in the future, whichever is later).

The details of the commitment are outlined in the Signatory Statement and the Guidance for Climate Target Setting for Banks.

The Signatory Statement and Guidance for Climate Target Setting for Banks apply to banks’ lending and investments and capital markets activities (Scope 3, Category 15). Banks’ targets should include their clients’ Scope 1, Scope 2 and Scope 3 emissions, where significant, and where data allow. Coverage is expected to increase as data quality and client reporting improves.

Banks’ own Scope 1, Scope 2 and non-category 15 Scope 3 (e.g. from business travel) emissions are not addressed in the Guidance, which focus only on banks’ Scope 3 Category 15 emissions. It is taken as given that banks will target net-zero emissions in their own operations well before 2050.

Targets should be set that cover all, or a substantial majority of, the carbon-intensive sectors, where data and methodologies allow. These sectors include agriculture, aluminium, cement, coal, commercial and residential real estate, iron and steel, oil and gas, power generation, and transport.

Signatories should prioritise sectors based on greenhouse gas (GHG) emissions, GHG emission intensities and/or financial exposure in their portfolio in their first round of target setting (within 18 months of signing). Notwithstanding methodological limitations, all or a substantial majority of the remaining carbon-intensive sectors from this list are recommended to be included in subsequent rounds of target setting (within 36 months of signing the Signatory Statement).

Banks should clarify which parts of their balance sheet are encompassed by their targets. Where entities within the bank’s structure carry out other types of business (such as insurance, pensions funds, or asset management), it may be appropriate for those entities to follow other frameworks’ approaches for net zero.

Targets should be set based on:

• Absolute emissions; and/or
• Sector-specific emissions intensity (e.g. CO2e/ metric).

While a bank’s targets may be supported by other approaches (e.g. production volume trajectories, technology mix) or measurements (e.g. financing targets), the emissions-based targets should nonetheless be set in absolute and/or emissions intensity terms or use an alternative methodology highlighted by the Alliance.

In contrast to targets, which may be set for absolute and/or intensity metrics, banks should report their emissions profile annually, providing both absolute and intensity metrics to give a complete picture.

Banks should publicly disclose their targets and report annually on progress. The financed emissions profile of the bank’s portfolio should also be calculated and disclosed annually. This should include, where targets have been set:

• Absolute emissions; and
• Sector-specific emissions intensity (e.g. CO2e/metric).

Within 12 months of setting the targets, banks should publish, a high-level transition plan, which may be part of existing disclosures, providing an overview of the categories of actions expected to be undertaken to meet the targets and an approximate timeline.

The Net-Zero Banking Alliance’s (NZBA) approach is meant to complement government-led climate strategies but not assume responsibility for achieving outcomes dependent on factors outside of the signatory bank’s reasonable control, nor directly regulate capital flows to any country, sector, or industry. Of key importance in the interpretation and implementation of the NZBA Signatory Statement is to support a just and orderly transition to net zero that will strengthen individuals, communities, and economies. NZBA members strive to do what is within their reasonable, independent, and individual control to assist in this just transition, including disclosing client financed emissions, establishing sectoral targets, and employing good faith efforts in their implementation of their individual and independent strategies.

Setting reliable intermediate goals for financed emissions of clients’ Scope 1, 2 and 3 emissions necessarily requires the availability of reasonably supported data and methodologies. Achievement of goals will be dependent on complex and interdependent decarbonisation efforts across the economy. More and better data is still needed, particularly with respect to Scope 3 emissions. As company-level and activity-level emissions data improves and technologies develop, members should enhance their targets for clients’ Scope 3 emissions to help fulfil their net zero targets in tandem with relevant national governments’ regulations, public policies, and mandates. Members plan to continue to work alongside government, industry, and clients to develop and support clients’ Scope 3 emission reduction targets in sectors for which relevant national governments are outlining sector specific transition strategies.

The Guidance for Climate Target Setting for Banks will evolve in line with best practice, development of scientific knowledge and availability of methodologies and tools following reasonable intervals in updates. Version 1 of the Guidance was published in April 2021, Version 2 of the Guidance was published in April 2024, and the current version was published in April 2025.

Any suggested changes to the Guidance or Signatory Statement are to be approved at Plenary level by signatories with a two-thirds majority and 50% of the membership having voted.

Generally, the Net-Zero Banking Alliance (NZBA) defines a bank as an entity that has a banking license to take deposits. However, other providers of capital and non-bank lenders may be considered on a case-by-case basis if the framework is applicable to their business model.

Net-Zero Banking Alliance (NZBA) membership is open to all banks domiciled in jurisdictions recognized by the United Nations. A bank does not need to be a member of UNEP FI to join NZBA, though membership is highly encouraged. Membership should ideally be at the group level, rather than subsidiary level, although this is possible.

Banks join NZBA regularly. An up-to-date list of members can be found here.

The Net-Zero Banking Alliance (NZBA) is a bank-led initiative convened by the UN. It is governed by a Steering Group made up of NZBA member banks that have been selected by the wider membership to fulfil the role. The Steering Group is structured to ensure that it represents banks from different regions and with a range of business models. The Chair of the Steering Group is selected by the members of the Steering Group.

At the ‘Principal’ level, C-suite delegates of the Steering Group banks provide strategic input. The ‘Representative’ level comprises working-level delegates from the Steering Group banks. They meet regularly to discuss NZBA business. The Alliance is supported and convened by a secretariat provided by UNEP FI, and the United Nations also holds a seat on the Steering Group.

NZBA is bank-led. Therefore, all bank members have responsibilities to contribute to NZBA, its governance, and its strategy. The Alliance operates in compliance with NZBA governance arrangements first adopted in October 2021 and last updated in April 2025. Read more here: https://www.unepfi.org/net-zero-banking/members/governance/.

See the following webpage for the current list of the members of the NZBA Steering Group: https://www.unepfi.org/net-zero-banking/members/governance/.

The Net-Zero Banking Alliance (NZBA) is a bank-led initiative. The UN Secretariat provides the day-to-day administrative oversight to NZBA and has a permanent seat on the Steering Group (SG). More specifically, the Secretariat:

• Ensures that the Alliance meets objectives on time and on budget, and that it does so following the general direction provided by the SG. To that effect, the Secretariat is empowered to make operational decisions as a matter of due course, while strategic decisions remain the responsibility of the SG.
• Supports the SG.
• Executes programmes and products of the Alliance on behalf of the Steering Group.
• Convenes and provides input on the strategic direction of NZBA.
• Coordinates regular meetings.
• Provides advice and guidance on technical and structural matters facing NZBA.
• At the direction of the NZBA leadership, prepares and conducts regular virtual calls of the work tracks that address technical and structural matters.
• Manages a secretarial budget.
• Supports NZBA communication.
• Manages strategic outreach to key partners, establishing linkages and regular communications with related initiatives.
• At the direction of the SG, consults scientific and technical experts.
• Facilitates the Alliance in achieving its objectives.
• Reports to relevant stakeholders on collective progress, as agreed by the SG.

The Net-Zero Banking Alliance’s (NZBA) purpose is to accelerate the real economy transition in line with the Paris Agreement by building member capacity for transition finance and facilitating climate leadership from the banking industry

The Alliance supports members through all stages of their Paris alignment journey by sharing emerging best practice; supporting policy engagement and client engagement as they develop and execute individual strategies to deliver their goals to achieve net-zero emissions across their portfolios.

To this end, NZBA aims to support the banking sector through two structures:

Firstly, it creates a platform for demonstration of leadership and consistency and credibility of action, by providing:

• a common standard/interpretation of what it means to be aligned to the goals of the Paris Agreement, aiming to limit global warming to well below 2°C, striving for 1.5°C.

Secondly, it aims to provide a structured forum to support banks’ transition to net zero emissions through:

• Facilitating capacity building within member banks by showcasing potential approaches for implementing decarbonization strategies, ambitions and targets.
• Facilitating learning and pro-competitively sharing experience to accelerate progress.
• Signposting resources, methodologies and leading practices around areas such as data.
• Identifying gaps and working with others to overcome them. Relevant stakeholders may include, but are not limited to international organizations, peers, customers, investors, governments, and other alliances.
• Connecting initiatives, members and broader stakeholders thereby minimizing fragmentation.
• Providing a voice for banks to communicate on the topic of transitioning to net zero in line with the Paris Agreement.

The Principles for Responsible Banking (PRB) is the UN’s sustainable banking framework, where signatory banks commit to contributing to society’s goals as expressed in the UN Sustainable Development Goals and Paris Climate Agreement as well as relevant national and regional frameworks.

PRB signatories – having undertaken a thorough impact analysis and publicly reported their findings – may identify climate mitigation as one of the key impact areas they wish to address as part of their PRB commitment.

In this instance, PRB signatories may find it useful to consult NZBA’s capacity building opportunities and technical guidance such as the Guidance for Target Setting for Banks. They may also readily access the full array of Climate Mitigation Journey guidance and resources available under the PRB to support them on this matter.