IIGCC Introduces System for Investors to Interact with Banks on Net Zero Goals

The IIGCC has released a framework to allow investors to engage with banks on reaching a net zero goal.

Today, the Institutional Investors Group on Climate Change (IIGCC) has unveiled a fresh net zero standard to provide direction for investors engaging with the banking industry.

The International Investor Group on Climate Change has created a standard and an associated assessment framework to assist investors in engaging with banks on their climate commitments. According to the global investor membership body, the framework is designed to help support discussions between the two parties.

Numerous institutional investors worldwide have decided to make their portfolios carbon neutral - a process that will need them to interact with the entities they invest in, including banks that are majorly involved in financing activities that create large amounts of emissions and renewable energy projects.

Stephanie Pfeifer, CEO of IIGCC, declared that the new standard and framework should help investors evaluate banks' preparedness to shift and mould their involvement tactics accordingly.

According to her statement, the banking industry significantly impacts the decarbonization of the world economy. She further explained that investors with net-zero commitments, which often include investments in banks, must be in constant conversation with banks concerning their transition plans to meet their obligations.

The documents created in cooperation with the Global Climate Transition Centre of the Transition Pathway Initiative resulted from a pilot study conducted last year and multiple rounds of consultation, according to the IIGCC.

The TPI Centre declared its intention to evaluate 26 international banks in Europe, North America, and Asia each year using the net zero banking assessment framework.

The IIGCC has pledged to collaborate with its collective of 25 investors, referred to as the 'net zero banks working group', to engage with a selection of 20 banks situated in Europe, Canada, and Asia.

The commitment to keep the public resource up-to-date with new methodologies, policies, and regulations was emphasized.

Matthews, the head of responsible investment at the Church of England Pensions Board, expressed his approval of the new framework. "This public system, which is based on impartial academic research, will give investors a method to evaluate banks," he noted. "It will prevent bogus claims of being green and assess the earnestness of banks' promises and the practical steps they take."