Financing 1.5°C: Five Trends to Watch in Climate-Aligned Finance in 2022

The briefing outlines five trends for climate-aligned finance in 2022: the substantiation of net-zero commitments through interim targets, the publication and assessment of credible transition plans, a shift toward real-economy impact over paper alignment, the adoption of forward-looking data and metrics, and the expansion of sectoral alignment agreements for high-emitting industries.

• Financial institutions are expected to move beyond general net-zero pledges by setting specific interim targets for 2025 and 2030. There is a significant gap in portfolio coverage; for instance, signatories of the Net Zero Asset Managers initiative reported that only 35 percent of their total assets under management are covered by net-zero targets.
• The credibility of financial institutions and industrial companies will increasingly depend on the publication of detailed transition plans to avoid greenwashing. Efforts to define 'credible' plans in 2022 include work by the UK Government Transition Plan Taskforce, GFANZ working groups, the ACT initiative, and CTP accreditation.
• There is a shift toward prioritizing 'real economy' impact over portfolio alignment on paper, as divesting from high-polluting companies does not necessarily reduce global emissions. This trend includes the launch of green investment products like green bonds, sustainability-linked loans, and green ETFs, as well as supporting sustainable development in emerging and developing markets.
• Investors are moving toward forward-looking metrics and asset-level quantitative data to assess transition risks and opportunities, rather than relying on historical data. Examples include the use of forward-looking emissions scenarios for US regulated utilities via RMI's Utility Transition Hub, and anticipated SEC rulemaking.
• Climate-aligned finance agreements are expanding into high-emitting, hard-to-abate sectors. Following the Poseidon Principles for shipping (launched 2019, expanded to insurers in December 2021), a similar agreement for the global steel sector was expected in the first quarter of 2022, with further agreements planned for aluminum, cement, concrete, aviation, and real estate.

APA

RMI (2022). Financing 1.5°C: Five Trends to Watch in Climate-Aligned Finance in 2022. https://rmi.org/resources/five-trends-to-watch-in-climate-aligned-finance-in-2022/

Chicago

RMI. Financing 1.5°C: Five Trends to Watch in Climate-Aligned Finance in 2022. 2022. https://rmi.org/resources/five-trends-to-watch-in-climate-aligned-finance-in-2022/.

Wikipedia

{{cite report |author=RMI |title=Financing 1.5°C: Five Trends to Watch in Climate-Aligned Finance in 2022 |date=10 January 2022 |url=https://rmi.org/resources/five-trends-to-watch-in-climate-aligned-finance-in-2022/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2022financing, author = {{RMI}}, title = {{Financing 1.5°C: Five Trends to Watch in Climate-Aligned Finance in 2022}}, institution = {RMI}, year = {2022}, month = jan, url = {https://rmi.org/resources/five-trends-to-watch-in-climate-aligned-finance-in-2022/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }