Up view in financial district, Manhattan, New York
Climate-Aligned Financial Sector
Shaping a role for the private financial sector to proactively support global decarbonization.
New York City financial district over Hudson River at dusk
What is Climate Alignment?
Climate alignment is the process of aligning lending and investment decisions with a downward glide path toward long-term decarbonization targets.
Low angle vew of skyscrapers in downtown Manhattan, New-York city.
Why Climate Alignment?
Expectations about the financial sector’s role in shaping a sustainable planet have evolved rapidly and have now converged on the notion of climate alignment. As climate alignment cements itself as an enduring feature of the financial landscape, financial institutions will increasingly be expected to accelerate the decarbonization of their portfolios through rapidly scaling up green investment while also supporting the transition of carbon-intensive industries, clients, and assets.
Vintage toned Wall Street at sunset, Manhattan, New York City, USA.
Why it Matters
There is an urgent need to decarbonize the global economy to align with scientific evidence, and there is a growing momentum among policymakers, regulators, and business leaders to drive an accelerated pace of change. The private financial sector, working in partnership with corporate clients across the real economy, can and should play an active role in achieving accelerated decarbonization.
New York City Financial District cityscape at dusk.
What We're Doing
As climate alignment rapidly becomes a global norm in the private financial sector, RMI is working to ensure that the frameworks, tools, and agreements are in place to enable financial institutions to support decarbonization as they transition their own portfolios toward climate alignment.
RMI pioneered the Poseidon Principles, the first global, sectoral climate alignment agreement for financial institutions. This agreement covers more than $100 billion of senior maritime shipping debt. Its design enables banks to continue doing business while also supporting the decarbonization of the shipping sector, which represents 2%–3% of global emissions.
RMI also worked closely with large private finance institutions to contribute to the Climate Finance Leadership Initiative’s report. The report, which provides the first private sector perspective on mobilizing finance for the low-carbon transition, profiles the challenges and opportunities of climate alignment.
Five common barriers banks, asset managers, asset owners, and other financial actors may face when considering alignment and how a sectoral approach can help.
Five barriers to alignment and how a sectoral approach can help.
The Poseidon Principles: A Groundbreaking New Formula for Navigating Decarbonization
Paul Bodnar and James Mitchell sit down to talk about the launch of the Poseidon Principles and what this means for the shipping industry and for global climate impacts.
Financing the Low-Carbon Future: A Private-Sector View on Mobilizing Climate Finance
How Private Finance is Moving the Needle on Climate Action