Treasury Department releases net-zero principles for financial institutions

The Treasury Department today published a set of nine voluntary principles to promote consistency among financial institutions that have made commitments to reduce greenhouse gas emissions through their financing and investment decisions. “The Principles for Net-Zero Financing and Investment” focus on so-called “scope 3” emissions that are not directly controlled by a business, such as the emissions generated when a consumer uses a company’s products. More than 100 U.S. firms have made voluntary net-zero emissions commitments, the department said.

Among the principles, the Treasury Department recommends that financial firms with net-zero commitments develop and execute transition plans to implement their pledges, establish “robust governance processes” for the commitments, and be transparent about their progress. “While the principles are directed at those firms that have already made a net-zero commitment or are considering making one, other financial institutions may find the concepts helpful as they navigate the risks and opportunities of the net-zero transition,” the department said.