Helping the financial sector transition the global economy towards a net-zero carbon future

What is climate alignment?

climate aligned portfolio chart

Climate-aligned finance is the process of bringing a financial institution’s portfolio of lending and investment activities into alignment with 1.5°C-consistent emissions pathway.

Evolving from a patchwork of efforts to improve the sustainability performance of major financial institutions, climate alignment offers an integrated approach and comprehensive decision framework that encompasses scaling up green investment, scaling back fossil fuel investment, and measuring and disclosing progress.

Why the financial sector?

As the world comes to grips with the magnitude and speed of the economic transition needed to avert catastrophic climate change, the vital role of finance is coming into focus. While finance cannot single-handedly decarbonize the real economy, financial institutions can and must—play a role in the low-carbon transition.

Decisions made within the financial sector affect the pace at which we replace aging carbon-intensive infrastructure and assets with net-zero carbon alternatives. Financial institutions are important stewards and enablers for driving a sustainable, inclusive and just transition. This will require financial institutions to not only increase investments in low-carbon assets, but also support their clients within carbon-intensive sectors to make the transition.

With over $18 trillion now committed to a 1.5°C future, climate alignment is cementing itself as the gold standard for financial sector climate action.

Our Approach

1

Building Sectoral Agreements

Convene leaders from carbon-intensive industries, their customers, and financial institutions to establish climate alignment agreements, similar to the Poseidon Principles for the shipping sector, in sectors like power utilities, oil & gas, steel, aviation, and cement

2

Developing Global Frameworks

Develop global, standardized frameworks and definitions for climate alignment spanning the financial sector

3

Supporting Individual Firms

Support financial institutions in navigating the organizational challenge of transforming into a climate-aligned financial institution

4

Shaping the Global Conversation

Shape public discourse through media and strategic communications to clarify and legitimize the concept of climate alignment

Our Partners

Initiator

Founding Partners

Supporters

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