The purpose of this Note is to support financial institutions’ efforts to scale capital allocation across the four key transition financing strategies by:
1. Providing supplemental information on the four key transition financing strategies to support and scale their adoption and thus inform net-zero transition plans; and
2. Proposing complementary, forward-looking approaches to evaluate the decarbonisation contribution potential of exposures that may be considered alongside other metrics and targets established within net-zero transition plans.
This Note sets out to deliver the former by outlining a set of attributes that allow the analysis of financing and/or enabling initiatives for applicability to each of the four key transition financing strategies. The latter introduces the concept of Expected Emissions Reduction (EER) as a forward-looking metric that estimates potential emissions reduction of exposures.
