FINANCIAL INSTITUTIONS’ TRANSITION PLANS

The report establishes a comprehensive framework for banks, investors, and insurers to create climate transition plans aligned with the 1.5°C goal. It details requirements for decarbonization targets, action plans, and engagement strategies, while providing 'red flag' indicators to identify greenwashing. The authors argue that current regulations are too vague and call for mandatory, standardized plans that include an immediate end to financing new fossil fuel production.

• To avoid misleading results caused by financial volatility in metrics like PCAF's attribution factors, the report recommends using Sectoral Portfolio Weighted Average Physical Intensity (WAPI) for most sectors and exclusively financial exposure targets for fossil fuel supply sectors.
• Robust transition plans must include an immediate cessation of all financial services for new coal power, new oil and gas production projects, and new LNG export terminals, as well as the companies developing them.
• The report proposes a specific energy financing ratio target by 2030, requiring financial institutions to provide at least six dollars in sustainable power supply financing for every one dollar provided to fossil fuels.
• Financial institutions are urged to implement a phased exit from thermal coal, with a complete phase-out by 2030 in OECD countries and by 2040 globally.
• To prevent greenwashing, the report identifies 'red flags' such as the use of carbon offsets to reach Scope 3.15 targets, the absence of intermediary targets every five years, or the inclusion of fossil-fuel related activities in the definition of 'climate solutions'.
• Transition plans should not focus solely on carbon; they must include biodiversity and nature transition plans aligned with the Kunming-Montreal Global Biodiversity Framework, including a phase-out of support for deforestation and peatland loss by 2025.
• The report emphasizes that transition plans must be integrated into corporate governance, specifically by tying the remuneration of board members and upper management to the achievement of transition plan objectives.
• A prioritization framework for financial services is suggested to maximize immediate impact, categorizing services like project finance, listed equities, and corporate bonds as 'High priority' for immediate and full inclusion in transition plans.

APA

Schreiber, P., & Etienne, C. (2024). FINANCIAL INSTITUTIONS’ TRANSITION PLANS. Reclaim Finance. https://reclaimfinance.org/site/wp-content/uploads/2024/12/Financial-institutions-transition-plans-how-to-drive-real-economy-decarbonization-report.pdf

Chicago

Schreiber, Paul, and Christophe Etienne. FINANCIAL INSTITUTIONS’ TRANSITION PLANS. Reclaim Finance, 2024. https://reclaimfinance.org/site/wp-content/uploads/2024/12/Financial-institutions-transition-plans-how-to-drive-real-economy-decarbonization-report.pdf.

Wikipedia

{{cite report |last1=Schreiber |first1=Paul |last2=Etienne |first2=Christophe |title=FINANCIAL INSTITUTIONS’ TRANSITION PLANS |publisher=Reclaim Finance |date=December 2024 |url=https://reclaimfinance.org/site/wp-content/uploads/2024/12/Financial-institutions-transition-plans-how-to-drive-real-economy-decarbonization-report.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{schreiber2024financial, author = {Schreiber, Paul and Etienne, Christophe}, title = {{FINANCIAL INSTITUTIONS’ TRANSITION PLANS}}, institution = {Reclaim Finance}, year = {2024}, month = dec, url = {https://reclaimfinance.org/site/wp-content/uploads/2024/12/Financial-institutions-transition-plans-how-to-drive-real-economy-decarbonization-report.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }