Net Zero Finance Tracker Methodology

The Net Zero Finance Tracker (NZFT) Methodology document describes the framework used by the Climate Policy Initiative (CPI) to assess how public and private financial institutions align their strategies and capital allocations with the goals of the Paris Agreement.

• The NZFT evaluates financial institutions across three primary dimensions: Targets, Implementation, and Impact. Targets and Implementation are assessed qualitatively using a tiered badge system based on transparency, concreteness, comprehensiveness, and ambition, while Impact is measured through quantitative metrics.
• The 'Impact' dimension utilizes specific quantitative indicators to track financial flows. These include project-level clean energy and fossil fuel financing (currently limited to the power sector), corporate-level green lending, exposure to misaligned assets and fossil fuels, and disclosed portfolio emissions.
• The tracker employs a badge-based scoring system for qualitative dimensions. A 'Full response' is awarded if all indicators in a dimension meet the highest criteria, while a 'Partial response' requires at least 50% of indicators to be scored as either 'Full' or 'Partial'. Other categories include 'Initial response', 'Planned response', and 'No action'.
• To provide aggregate views of progress, the NZFT allows for data distribution to be weighted by different financial metrics: Assets Under Management (AUM), Total Assets, Revenue, or a combination of AUM and Total Assets. The document notes that these distributions are biased toward public institutions due to disclosure requirements.
• The current scope of the NZFT 2.0 focuses on members of the Glasgow Financial Alliance for Net Zero (GFANZ). As of December 2022, this included 553 institutions with combined owned assets and AUM totaling USD 85 trillion.
• The methodology follows a strict rule of action attribution where climate actions are attributed exclusively to the entity level reported by the data source. Actions taken by a subsidiary do not contribute to the score of the parent headquarters, and vice versa.

APA

Micale, V., Marini, N., Connolly, J., & Fernandes, P. D. A. (2023). Net Zero Finance Tracker Methodology. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/10/NZFT-Methodology.pdf

Chicago

Micale, Valerio, Nikita Marini, Jake Connolly, and Pedro de Aragão Fernandes. Net Zero Finance Tracker Methodology. Climate Policy Initiative, 2023. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/10/NZFT-Methodology.pdf.

Wikipedia

{{cite report |last1=Micale |first1=Valerio |last2=Marini |first2=Nikita |last3=Connolly |first3=Jake |last4=Fernandes |first4=Pedro de Aragão |title=Net Zero Finance Tracker Methodology |publisher=Climate Policy Initiative |date=November 2023 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2023/10/NZFT-Methodology.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{micale2023net, author = {Micale, Valerio and Marini, Nikita and Connolly, Jake and Fernandes, Pedro de Aragão}, title = {{Net Zero Finance Tracker Methodology}}, institution = {Climate Policy Initiative}, year = {2023}, month = nov, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2023/10/NZFT-Methodology.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }