The Science Based Targets initiative (SBTi) has launched the first net-zero standard tailored specifically for financial institutions, providing banks, asset managers, insurers, and private equity firms with a formal blueprint to align their financed emissions with global climate goals.
The SBTi is a global body that sets and validates corporate climate targets to ensure they are aligned with the latest climate science. It is a partnership between four organisations: the Carbon Disclosure Project (CDP), the United Nations Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). CDP—formerly the Carbon Disclosure Project—is a non-profit that runs a global disclosure system for companies and governments to report environmental data, including emissions, climate risks, and deforestation.
Announced on 22 July 2025, the Financial Institutions Net-Zero (FINZ) Standard defines science-based criteria for setting short-, medium-, and long-term emissions targets across lending, investment, insurance underwriting, and capital markets activity. It focuses on so-called “financed emissions”—those linked to portfolio exposures—which account for the vast majority of a financial institution’s climate impact.
More than 135 financial institutions across six continents have committed to adopt the new framework, according to the SBTi. Development of the standard spanned over three years, incorporating two public consultations, input from a 45-member Expert Advisory Group, and pilot testing by more than 30 firms globally.
“Financial institutions have the ability to play a transformative role in the transition to net zero,” said Alberto Carrillo Pineda, Chief Technical Officer at the SBTi. “Their influence on the global economy and ability to engage with their portfolios is unparalleled to accelerate the net-zero transition. With its broad applicability and flexibility, this robust, science-based Standard will help financial institutions drive the net-zero transformation all over the world.”
The FINZ Standard requires institutions to adopt public commitments to reach net zero by 2050, and to set portfolio-level alignment or sector-specific financed emissions targets. One of its most notable provisions is the requirement for firms to implement fossil fuel financing policies by 2030 that restrict funding for new coal, oil, and gas expansion. Institutions with material exposure to agriculture or land-use sectors must also commit to eliminating deforestation from their portfolios by 2025.
Financial institutions have until December 2026 to submit targets for validation under the FINZ Standard. As of now, no firm has confirmed validation under the new framework, although several have had their targets approved under the SBTi’s earlier near-term criteria.
Early adopters under SBTi’s previous near-term framework include institutions such as La Banque Postale in France, which received validation for its climate strategy and pledged to phase out fossil fuel financing in alignment with the Paris Agreement. As of April 2024, the broader La Poste Groupe (which includes La Banque Postale) had its roadmap to achieve net zero by 2040 validated by the SBTi across its logistics, postal and financial activities—making it the only French company with certified targets across both banking and logistics, according to La Banque Postale.
British asset manager Schroders was among the first 20 financial institutions globally to have financed emissions targets validated by the SBTi. “We were among the first 20 financial institutions to have our targets validated formally by the Science Based Targets initiative (SBTi). The validation confirmed that our Scope 1 and 2 targets are in line with a 1.5 °C trajectory and that our relevant assets under management are targeted to be fully aligned with a 1.5 °C pathway by 2040,” the firm stated in its 2023 climate report.
“This is a major step forward for the finance sector,” said Nate Aden, Finance Sector Lead at the SBTi. “The FINZ Standard provides the tools and guidance needed to move from ambition to accountability.”
The FINZ Standard is expected to serve as a reference point for regulators, investors, and civil society stakeholders evaluating the credibility of financial-sector climate pledges. Its release comes amid growing demand for transparency and enforceability in net-zero commitments across global markets.
