The net-zero efforts of global financial institutions are responding to the ever-changing policy landscape. Recent media reports suggest that the Zero Zero Banking Alliance (NZBA) is considering relaxing or even removing some of its accountability processes as part of a broader overhaul. Zero Asset Management Net Manager Program (NZAMI) removed its commitment statement, signatories list and targets from its website in January.
These adjustments have attracted criticism and attention in the world’s most prominent net zero zero alliances about how best to increase ambitions and track progress in financial institutions with their own net zero commitments. However, independent research organizations may be better able to support these roles.
NZBA, NZAMI and other alliances play a key role in promoting meaningful action. CPI research shows that there is a significant correlation between the alliance membership of financial institutions and progress to climate-related goals. For example, European pension funds belonging to the net zero alliance are six times more likely to adopt climate targets and five times more likely to implement viable decarbonization measures.
Work by CPI and other independent research organizations shows that financial institutions joining the climate alliance tend to outperform others in climate-related indicators. These include setting mitigation goals, policy engagement, and disclosure of climate risk and investment data. However, progress in the real world that affects climate change remains elusive.
So the question is whether the net disclosure and liability process through the net zero alliance is best suited to support meaningful advancement.
These alliances tend to report aggregated data for all members. This is undoubtedly useful for banks and other financial institutions to benchmark their performance against their peers and to understand how others can deal with climate-related business and technical challenges. However, it is not very useful for regulators, supervisors or investors because it does not allow them to compare the performance of individual institutions to each other, and certainly does not compare with entities outside these alliances.
On the other hand, independent platforms such as CPI's net zero financial tracker use data from different sources to close reporting gaps and can compare individual institutions. NZFT standardizes nearly 1,000 financial institutions worldwide by summing up data from multiple third-party sources to generate an independent view of the progress of the net zero target.
By providing clear, open, actionable data, initiatives such as NZFT enable stakeholders, including civil society, regulators and investors to identify leaders, laggards, and opportunities to improve climate financing practices.
As climate alliances respond to political and economic changes, their zero-zero transition work has rotated their zero-net transition work, we can seek existing efforts from independent organizations to fill the information gap. The work of these alliances remains crucial. They can and should provide guidance and support to their members in transition efforts, while independent providers provide critical stakeholder data to assess the progress and impact of financial institutions.
Net Zero Financial Tracker About CPI
There are about 15 indicators of the interactive NZFT data platform in the impact of financial institutions from goal to implementation to real-world impact to real-world impact to real-world impact.
The platform provides extensive coverage for financial institutions’ net zero progress, tracking approximately 1,000 entities in 2024 and 2,000 of the world’s largest financial players by 2025. Users can explore data by filtering country (sub) departments and alliance types to identify aggregated and agency-specific information. The company currently provides data for 2019 to 2023 every year. As the platform continues to expand, it provides investors, financial institutions and policy makers with useful tools to track progress and drive a sense of responsibility in the transition to a low-carbon economy.
