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Report

Zeroing In

The US Financial Sector Perspective on Net-Zero Lending and Investing

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Climate alignment in the financial sector has the potential to drive systemic and holistic change in the real economy. Rather than a reactive approach that treats climate change as a risk to be managed, climate alignment demonstrates a marked shift toward proactively supporting the transition to a net-zero future.

In the report Zeroing In, we present a summary assessment of net-zero lending and investing perspectives in the US financial sector. These perspectives were gathered in a pair of workshops with representatives from a number of financial institutions. The workshops were convened by RMI, in partnership with the Carbon Trust, on behalf of the UK’s Foreign, Commonwealth, and Development Office (FCDO).

Challenges and enablers for climate-aligned finance

The aim of the workshops was twofold: to better define what a net-zero commitment means to US financial institutions and to clarify the key enablers to making and implementing those commitments.

The key enablers and recommendations outlined in the report address a range of logistical, organizational, and regulatory challenges. For instance, US institutional investors currently face an uncertain regulatory environment that creates barriers to climate-aligned decision-making. Clearer guidance around materiality and fiduciary duty would provide confidence that integrating climate into decision-making processes will not be met with regulatory scrutiny.

The summary analysis in this report is intended for finance-industry leaders from institutions that have made or are considering commitments to net-zero or climate-aligned portfolios. The insights will also apply to financial regulators, as well as individuals working on climate frameworks, metrics, and disclosure processes for corporate entities.