Unpacking the finance sector's climate-related investment commitments

The report finds that financial institutions managing at least USD 47 trillion in assets—approximately 25% of the global financial market—have committed to climate-related investment targets. It identifies three primary mechanisms for influencing emissions: divestment, positive impact investment, and corporate engagement. The analysis emphasizes that divestment alone may not reduce real-economy emissions if other investors purchase the carbon-intensive assets, and notes that most institutions with such targets are currently concentrated in Europe, the United States, and Australia.

• Financial institutions with cumulative assets under management of at least USD 47 trillion have committed to climate-related investment targets, which constitutes approximately 25% of the global financial market estimated at USD 180 trillion.
• Divesting from carbon-intensive assets to align a portfolio with the Paris Agreement does not guaranteed emission reductions in the real economy, as other entities may invest in the sold assets; real emission reductions require a large share of the financial sector to implement robust targets.
• The report categorizes climate-related investment mechanisms into three types: divestment, positive impact investment, and corporate engagement, each influencing investee companies and global GHG emissions differently.
• The likelihood of investment targets impacting actual emission levels is influenced by factors such as the size of the financial institution (assets under management) and the investee company's previous experience with ESG.

APA

NewClimate Institute (2020). Unpacking the finance sector's climate-related investment commitments. http://www.newclimate.org/resources/publications/unpacking-the-finance-sectors-climate-related-investment-commitments

Chicago

NewClimate Institute. Unpacking the finance sector's climate-related investment commitments. 2020. http://www.newclimate.org/resources/publications/unpacking-the-finance-sectors-climate-related-investment-commitments.

Wikipedia

{{cite report |author=NewClimate Institute |title=Unpacking the finance sector's climate-related investment commitments |date=22 September 2020 |url=http://www.newclimate.org/resources/publications/unpacking-the-finance-sectors-climate-related-investment-commitments |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2020unpacking, author = {{NewClimate Institute}}, title = {{Unpacking the finance sector's climate-related investment commitments}}, institution = {NewClimate Institute}, year = {2020}, month = sep, url = {http://www.newclimate.org/resources/publications/unpacking-the-finance-sectors-climate-related-investment-commitments}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }