The Banking Executive Magazine - February 2023 Issue

Transition To Net-Zero urement capabilities; set and monitor progress toward well-defined targets; and identify opportunities to support clients in their decarbonization tran- sition. COUNTRIES NET ZERO TARGETS Since the adoption of the Paris Agreement, a growing number of countries have committed to net zero emissions targets. More than 70 countries, including the biggest polluters, China, the United States, and the European Union, have set a net zero target, covering about 76% of global emis- sions. Over 1,200 companies have set sci- ence-based targets in line with net zero, and over 400 financial institu- tions have joined the Race to Zero, pledging to take immediate and rig- orous action to halve global emis- sions by 2030. HSBC GUIDE TO NET ZERO The Hongkong and Shanghai Bank- ing Corporation Limited, HSBC, pro- duced a guide that walks through the steps needed to implement a net- zero strategy for financed emissions. It provides recommendations about the key choices banks will face as they develop robust strategies, along- side an overview of the potential trade-offs involved. The guide pro- vides critical insight into the deci- sion-making processes of some of the world’s largest banks, highlighting areas for potential common ground across the industry. It explores how banks can engage with clients and policymakers to deliver financing to help accelerate the transition to a low carbon economy, and disclose progress transparently for stakehold- ers. Ultimately, the guide looks to progress the industry dialogue on how banks can move from net zero ambition to implementation and ac- tion. BARCLAYS BANK BEST PRACTICE IN TRANSITION TO NET ZERO Seventy-five of the world’s central banks and financial regulators have joined together to form the Network for Greening the Financial System, which seeks to mobilise mainstream finance to support the transition to- ward a sustainable economy. Bar- clays bank is amongst the 197 banks to have signed the United Nations Environment Programme UNEP Fi- nance Initiative’s Principles for Re- sponsible Banking, which calls for banks to align their business activi- ties to the Paris Agreement. Barclays bank journey to becoming a net zero bank by 2050 is guided by six principles. 1) Transparent disclosure: tracking progress in aligning financed emissions with the Paris Agree- ment, starting with energy, power, cement and steel. 2) Working with clients to acceler- ate and help facilitate clients tran- sition to a low-carbon economy wherever possible. 3) Evolving adopted approach: Bar- clays bank approach to becoming a net zero bank is evolving over time, as the world changes. 4) Recognising the commercial op- portunity: The transition to a low- carbon economy is defining opportunity for innovation and growth. There is a significant op- portunity for Barclays to play a leading role in helping to meet the demand for climate change related financing to support the transition. 5) Supporting negative emissions technologies: Barclays bank is taking steps in the short, medium, and long term to facilitate the de- velopment of negative emissions technology and markets. This in- cludes investing in early-stage in- novation and research in the near term. 6) Deploying negative emissions technologies to offset any residual gap-to-net-zero by adopting an approach which is principally fo- cused on emissions reduction. To align Barclays bank financing to the Paris Agreement, including capi- tal markets activity, it was necessary to create a methodology that builds on and extends existing industry ap- proaches. ISSUE 170 FEBRUARY 2023 the BANKING EXECUTIVE 33