The Science Based Targets initiative (SBTi) has released its finalized Financial Institutions Net-Zero (FINZ) Standard, the first global framework to guide banks, asset owners, asset managers, insurers, and other financial institutions in aligning their lending, investing, insurance, and capital markets activities with net-zero emissions by 2050.
What Is the SBTi?
Launched in 2015, the Science Based Targets initiative (SBTi) is a global body that promotes best practices in science-based emissions reduction and net-zero target setting.
Key functions include:
- Defining science-based environmental targets
- Providing technical guidance to companies
- Independently validating climate targets
SBTi introduced the Corporate Net-Zero Standard in 2021 (for cross-sector companies), and the new FINZ Standard now expands this framework specifically to the financial sector.
What the FINZ Standard Covers
Developed through two public consultations and tested by over 30 institutions, the FINZ Standard introduces specific expectations for financial institutions to align their operations and portfolios with net-zero goals:
- Entity-level net-zero commitment by 2050 or earlier
- “In-scope” activity classification: Financial activities representing 5%+ of revenue must be assessed and targeted
- Fossil fuel transparency policy:
- Immediate end to project financing for fossil fuel expansion
- No general-purpose finance for coal expansion now
- End oil and gas expansion finance by 2030
- Base year assessments: Including GHG emissions inventory, sector-level climate alignment, and clean energy vs. fossil fuel exposure
- No-deforestation policy: Assess deforestation exposure by 2030 and publish an engagement plan if significant
- Real estate policy: Promote zero-carbon-ready new builds and retrofit financing
- Annual disclosure requirements: Publicly report on emissions, fossil fuel exposure, clean energy share, and deforestation risks
- 5-year target cycles: Institutions must review and update progress every five years
Why It Matters
The FINZ Standard is a significant milestone in climate accountability for financial markets. By requiring policies on fossil fuel exit, deforestation, and building de-carbonization, it goes beyond voluntary pledges and places science-based climate alignment at the core of financial decision-making.
With over 135 financial institutions already committed to setting targets using the FINZ framework, the standard is poised to shape future regulatory and investor expectations.
Implications for Financial Institutions
Financial institutions must:
- Define climate-aligned investment and lending strategies
- Prioritise high-emitting sectors for transition
- Develop fossil fuel phase-out policies
- Embed climate alignment in governance, disclosure, and client engagement
This shift will influence lending terms, capital allocation, and ESG scoring across industries, particularly those in fossil fuels, heavy industry, real estate, and land use.
How EcoActive ESG Can Support
EcoActive ESG offers robust capabilities to support organisations in aligning with evolving climate disclosure frameworks like the FINZ Standard:
- In-built GHG calculators for Scope 1, 2, and 3 emissions to help quantify, track, and manage emissions data
- Tools to support the design of engagement and divestment strategies, enabling climate-aligned decision-making
- Streamlined workflows for annual ESG reporting and 5-year progress tracking, helping you stay audit-ready and compliant
Our platform empowers sustainability teams to act early, stay informed, and meet the demands of a rapidly changing regulatory landscape. Whether you’re a bank, insurer, or asset manager, we can help you operationalize your net-zero strategy with clarity, compliance, and credibility.
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