Unpacking the finance sector's climate-related investment commitments

The NewClimate Institute report analyzes the scale and ambition of climate-related investment targets set by financial institutions and international cooperative initiatives (ICIs), examining how these targets correlate with greenhouse gas (GHG) emission reductions in the real economy.

• Financial institutions managing at least USD 47 trillion in cumulative assets 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 guarantee emission reductions in the real economy, as other entities may purchase the sold emission-intensive assets. Real emission reductions occur only when a large portion of the financial sector implements robust climate-related investment targets, forcing investees to react.
• The report identifies three primary mechanisms financial institutions use to influence global GHG emissions: corporate engagement, positive impact investment, and divestment.
• The effectiveness of climate-related investment targets on actual emission levels is influenced by factors such as the size of the financial institution (via assets under management) and the investee company's prior experience with ESG. These factors vary by target type and asset class; for instance, corporate engagement is typically more effective when there is direct access to the management of the investee.

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} }