Glasgow Financial Alliance for Net Zero Consults on Guidance on Nature in Net-Zero Transition Plans and Index Guidance to Support Real-Economy Decarbonization

The Glasgow Financial Alliance for Net Zero has published a consultation paper on nature in net-zero transition plans, which supplements the guidance provided in its November 2022 financial institution net-zero transition plans report. The proposed guidance covers opportunities to reduce nature emissions or increase nature sinks (natural climate mitigation), as well as opportunities to support emissions reductions and sequestration through nature-related activities (natural climate enablers). GFANZ explains that collectively, these nature-related levers expand the toolkit for financial institutions to achieve their net-zero commitments and may identify more potential net-zero financing opportunities. GFANZ notes that general impacts on nature from climate change are beyond the scope of the proposed guidance but are discussed in the consultation paper as an area for ongoing consideration, which may lead to integrated transition planning in the future. The deadline for comments is January 27, 2025. GFANZ expects to publish the final supplemental guidance in Q1 2025.

GFANZ has also published a consultation on index guidance to support real-economy decarbonization. The proposed guidance provides index providers, data providers, stock exchanges, asset managers, asset owners and other investors with voluntary guidance for "transition-informed" indices that may help facilitate real-economy decarbonization. The paper does not prescribe a specific course of action but offers information and options to help index participants in developing and adopting "transition-informed" indices. The paper also links to a newly published set of case studies on transition finance and decarbonization contribution methodologies, which aims to provide context and examples of how financial institutions are scaling finance and engagement across the GFANZ four key transition financing strategies. The deadline for comments is January 9, 2025. GFANZ expects to publish the final guidance in Q1 2025.

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