Unpacking Green Targets: A Framework for Interpreting Private Sector Banks’ Sustainable Finance Commitmentsby , , and -
Private sector banks are facing political, market, and societal pressure to direct finance towards low carbon, sustainable development. One way they’re signaling their response is through sustainable finance commitments: publicly-made, time-bound commitments to provide or facilitate capital for climate and sustainability solutions. While the commitments may appear straightforward at first glance, comparing them is anything but. They vary widely in structure and provide only a limited picture of a bank’s approach to sustainability.
To facilitate improved understanding, this technical note presents a framework for interpreting sustainable finance commitments using information published by committing banks. The framework focuses on aspects of the commitment design, accountability, and transparency, as well as the portfolio context of the banks. The outputs describe key characteristics of a commitment and enable comparison of commitments from different institutions.