Financing credible transitions

This executive summary from the Climate Bonds Initiative proposes an ambitious framework for identifying and labeling 'credible' transition investments to prevent greenwashing and support the growth of a transition bond market aligned with the Paris Agreement.

• The framework establishes five core principles to ensure a transition is ambitious and credible: alignment with a 1.5 degree trajectory (zero carbon by 2050 and nearly halving emissions by 2030), guidance by scientific experts, the exclusion of offsets (while counting upstream scope 3 emissions), the prioritization of technological viability over economic competitiveness, and a requirement for operating metrics rather than future pledges.
• The transition concept is designed to be flexible, applying to both whole entities (via equity, general purpose bonds, and sustainability-linked loans/bonds) and specific activities (via asset-backed securities and use of proceeds bonds).
• Economic activities are categorized into five types 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 align with targets and have low-emission substitutes).
• The framework distinguishes between 'green' and 'transition' labels. The green label is for investments with a long-term role in a low carbon economy that are near zero or following Paris-aligned pathways. The transition label is for investments that either make a substantial contribution to 2030/2050 goals but lack a long-term role, or will have a long-term role but currently have an uncertain pathway to net zero.

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} }