NZBA commitments extended to capital markets

John Kavanagh

The world’s largest banks, including Australia’s big four, will extend the scope of their emissions reductions targets to include capital markets activities, following an update of the Net-Zero Banking Alliance guidelines.

The NZBA’s 140 members banks signed off on a new version of the Guidelines for Climate Target Setting for Bank this month.

The alliance said in a statement: “For some banks capital markets arranging and underwriting services provided to clients in the issuance of new debt and equity instruments are their largest source of attributable greenhouse gas emissions.”

The updated guidelines will also reflect the evolution of practices, methodologies and data availability over the three years since the NZBA was started.

The core commitments remain unchanged. Member banks aim to reach net zero by 2050 or sooner, with intermediate 2030 sectoral targets using “no overshoot 1.5 degrees scenarios” covering all or a substantial majority of nine-carbon intensive sectors.

Australian bank members of the NZBA are ANZ, Commonwealth Bank and its New Zealand subsidiary ASB, NAB and its New Zealand subsidiary BNZ, and Macquarie Group. Australian non-bank members include insurers, IAG, QBE, Suncorp and TAL

The revised guidelines cover banks’ lending, investment and capital markets activities. Targets must include clients’ scope 1, scope 2 and scope 3 emissions, where significant and where data allows. Capital markets targets will apply from November.

The financed emissions profile of a bank’s portfolio must be calculated and disclosed annually. No specific methodology is required to calculate values but banks are required to use credible sources and explain their methodologies.