07/22/2025 | Press release | Distributed by Public on 07/22/2025 13:35
Patrick Davis, Public Citizen, pdavis@citizen.org
Ginny Roscamp, Sierra Club, ginny.roscamp@sierraclub.org
LONDON - The Science Based Targets Initiative(SBTi), the preeminent standard-setter for corporations making net-zero commitments, has published the final version of its Financial Institutions Net Zero Standard(FINZ). The final version of the standard incorporated some feedback, including from a joint commentin October 2024 from Sierra Club and Public Citizen, to maintain a requirement for financial institutions to adopt a fossil fuel transition policy, encompass insurance underwriting for fossil fuels into the standard, and maintain a prohibition on the use of carbon removals in the calculation of portfolio emissions.
SBTi's mandatory fossil fuel transition policy requires financial institutions to immediately cease all financing for coal expansion, immediately cease all new project financing for oil and gas expansion, and phase out general purpose financing for companies engaging in oil and gas expansion no later than 2030.
The final standards failed to incorporate some recommendations, including requiring financial institutions to issue transition plans, closing loopholes on what constitutes "in-scope" financial transactions, and expanding the list of emissions-intensive activities and sectors. The final standard also waters down language around deforestation policies, and gives financial institutions years of leeway before requiring an end to general purpose financing for fossil fuel expansion, which will likely lock in decades of dependence on oil and gas due existing expansion plans.
"SBTi's finalized guidelines clarify what constitutes credible net-zero plans for financial institutions. It is encouraging that this new standard makes clear, in no uncertain terms, that financing fossil fuel expansion is fundamentally incompatible with any serious net-zero commitment. While there are opportunities to further strengthen this standard, it is an important and necessary step forward for the financial sector. It is imperative that global financial institutions adopt this standard and align their strategies accordingly," said Jessye Waxman, Policy Advisor for the Sierra Club's Sustainable Finance campaign.
"Today's final standard for financial institutions exemplifies the critical role SBTi plays in the fight against climate change-in a fractured and often dysfunctional policy ecosystem, ensuring a science-based and credible net zero architecture for financial institutions is more important than ever," said Ernesto Archila, climate and financial regulation policy director with Public Citizen's Climate Program. "FI's should adopt and implement this standard because of the vitally important elements it contains, especially the clear recognition that carbon removals and credits cannot be used in calculating portfolio emissions, the inclusion of insurance underwriting of fossil projects as in-scope, and the immediate cessation of project financing for new fossil fuel infrastructure. Unfortunately, it fails on a number of dimensions to live up to the needs of the moment, including by watering down deforestation requirements, postponing until 2030 a requirement to cease general purpose finance for oil and gas, and failing to require transition plans."
About the Sierra Club
The Sierra Club is America's largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit https://www.sierraclub.org.