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Transitioning to Net Zero for Finance 

September, 2021 - Shoosmiths LLP

We are very excited to be supporting the UN Global Compact Network UK’s ‘Transitioning to a Net Zero’ webinar series.

The next webinar in the series, ‘Transitioning to Net Zero for Finance’ took place on Thursday, 9 September 2021 and featured guest speakers:

The key takeaway points are set out below along with the webinar recording:

  • The Science Based Targets initiative (SBTi) is working on an economy-wide net zero standard (to be released later this year). As part of this work, the SBTi has developed key concepts and recommendations for setting and assessing corporate net zero targets.
  • Financial institutions are encouraged to set science-based targets through the SBTi. Guidance for the financial sector can be found here.
  • The financial sector has a key role to play in supporting the transition to net zero by 2050. Nick Villiers (Director of Sustainable Finance, Cambridge Institute for Sustainability Leadership (CISL)) noted that organisations must act now to institutionalise sustainability throughout their business in order to drive change.
  • Sagarika Chatterjee (Director of Climate Change, Principles for Responsible Investment and COP26 High-level Champions Finance Co-Lead) discussed the benchmarks for success at COP26 and called on financial institutions to join the Race to Zero, a global campaign that encourages setting net zero targets and quickly reducing carbon emissions.
  • The Glasgow Financial Alliance for Net Zero (GFANZ) was launched earlier this year as an umbrella group for financial actors committed to the Race to Zero. The group aims to address finance-specific issues in the transition, motivate the financial system to mobilise the trillions of dollars necessary to build a global zero-emissions economy, and coordinate financial actors to deliver on the goals of the Paris Agreement.
  • Fiona Hyde (Senior Sustainability Manager, TSB Bank) provided an overview of TSB’s responsible business strategy and how they plan to reach net zero emissions by 2030. More information can be found in their ‘Do What Matters Plan’.
  • Simon Gadd (Group Climate Change Director, Legal & General) discussed the three areas that Legal & General focus on in their net zero strategy, including how they invest assets in support of the net zero transition, influence companies and individuals to align their own funds with net zero and decarbonisation actions, and how their own operations are run.
  • With regards to climate disclosures:
    • it was noted that the Task Force on Climate-related Financial Disclosures has been a useful driver for comparability and consistency in disclosures;
    • temperature alignment metrics and forward-looking metrics are helpful and allow for cross-comparison. CISL provide guidance on this;
    • financial institutions and other businesses are strongly encouraged to disclose their Scope 3 emissions in addition to their Scope 1 and 2 emissions and develop plans for addressing them in their net zero strategies. The SBTi require companies to have a full Scope 3 inventory.
  • The role of divestment was noted as a topic of research due to the mostly unknown consequences that it could have on the financial system.
  • Nature-based solutions (actions to protect, sustainably manage, and restore ecosystems through the use of nature) could play a part in supplementing corporate net zero strategies, dependant on the quality of the schemes. It is important that robust assessments of these solutions are conducted before implementation.

Resources referenced during the event:

 



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