Financing credible transitions

The Climate Bonds Initiative proposes a framework for 'transition' labels to prevent greenwashing and ensure investments align with the Paris Agreement. The framework establishes five core principles for ambitious transitions: alignment with a 1.5 degree trajectory (net zero by 2050), science-based goals, the exclusion of offsets, the prioritization of technological viability over economic competitiveness, and a requirement for operating metrics over pledges. It categorizes economic activities into five types—Near Zero, Pathway to Zero, No Pathway to Zero, Interim, and Stranded—to determine whether a 'green' or 'transition' label is appropriate. The framework is designed to be flexible, applying to both whole entities (via equity or sustainability-linked bonds) and specific activities (via use-of-proceeds bonds).

• A credible transition must adhere to five principles: it must align with a 1.5 degree trajectory (zero carbon by 2050 and nearly halving emissions by 2030), be led by scientific experts, exclude offsets while counting upstream scope 3 emissions, prioritize viable technology even if expensive, and be backed by operating metrics rather than future pledges.
• The framework categorizes economic activities into five distinct groups based on their necessity post-2050 and their ability to be decarbonized: 'Near Zero' (already at or near net-zero), 'Pathway to Zero' (needed beyond 2050 with a clear 1.5-degree pathway), 'No Pathway to Zero' (needed beyond 2050 but lacking a clear pathway), 'Interim' (needed now but to be phased out by 2050), and 'Stranded' (cannot meet targets and have low-emission substitutes).

APA

Climate Bonds Initiative (2020). Financing credible transitions. https://www.climatebonds.net/files/documents/publications/Financing-Credible-Transitions-Summary-Note.pdf

Chicago

Climate Bonds Initiative. Financing credible transitions. 2020. https://www.climatebonds.net/files/documents/publications/Financing-Credible-Transitions-Summary-Note.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Financing credible transitions |date=September 2020 |url=https://www.climatebonds.net/files/documents/publications/Financing-Credible-Transitions-Summary-Note.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2020financing, author = {{Climate Bonds Initiative}}, title = {{Financing credible transitions}}, institution = {Climate Bonds Initiative}, year = {2020}, month = sep, url = {https://www.climatebonds.net/files/documents/publications/Financing-Credible-Transitions-Summary-Note.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }