This brief offers key insights for financial institutions who are considering or are have already begun to align the emissions impacts of investment portfolios and activities with global decarbonization targets. The brief outlines five common barriers that institutions face when attempting to achieve climate alignment, and details how a sector-by-sector approach to alignment can provide an efficient, pragmatic, and effective way forward.
According to authors of the report “a sectoral approach helps break down challenges into more manageable pieces, and brings the locus of problem-solving to the relevant level. Sectors, such as power generation, shipping, aviation, or steel production, each have their own distinct political economies, technological and business model pathways toward decarbonization, and data gaps.”