Ginny Cleaveland, Deputy Press Secretary, Federal Communications, Sierra Club, ginny.cleaveland@sierraclub.org, 415-508-8498 (Pacific Time)
WASHINGTON, DC — Today, the U.S. Department of the Treasury published the Principles for Net-Zero Financing & Investment. The voluntary principles highlight some key components of net-zero transition plans, and underscore the importance of consistency and credibility in the implementation of these commitments from the financial sector. This is the first time a major U.S. government agency has provided any guidance to the financial sector on the development and implementation of net-zero transition plans.
The Treasury’s new principles focus on financial institutions' Scope 3 financed and facilitated greenhouse gas emissions, and build off an extensive body of work developed across the public and private sectors and civil society around the world. Though the use of the principles is wholly voluntary, they are intended as a resource for financial institutions in implementing their net-zero plans.
The document features nine high-level principles, including general guidance on the development of transition plans aligned with the goal of limiting global temperature rise to 1.5 degrees Celsius, deployment of capital for climate solutions, and engagement with clients and portfolio companies. However, the document does not provide detailed recommendations on best practices for the development of robust targets and metrics.
In response to the news, Ben Cushing, Campaign Director for the Sierra Club’s Fossil-Free Finance campaign, issued the following statement:
“In the absence of regulation, the financial sector has become a Wild West of voluntary climate pledges with little government oversight. Through its new principles, the Treasury Department is sending a message to the biggest financial market in the world and adding to the growing chorus emphasizing the importance of financial firms following through on their climate goals.
Though these principles are a key step forward, the Treasury unfortunately has not provided detailed recommendations that will improve the efficacy, comparability, and transparency of financial sector net-zero plans, leaving the sector mostly to its own devices to determine best practices. The U.S. government must provide clarity on what credible transition plans should look like and steer the financial sector in the right direction.”
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 www.sierraclub.org.