Green loans and ESG lending services

To limit annual global warming to 1.5°C, as stipulated in the Paris Agreement, greenhouse gas emissions need to be reduced by 45% by 2030 and reach net zero by 2050. To ensure a low-carbon economy, a group of more than 140 banks founded the "Net Zero Banking Alliance (NZBA)" and have committed to aligning their loan books to a net-zero economy by 2050.

Analysing client transition plans (CTPs) and continued engagement with clients to align their emission-reduction plans with banks’ commitment to net zero are key to the success of the NZBA. CTPs are essential for financial institutions to navigate the complex transition to a low-carbon economy. A CTP’s success would also depend on financial institutions aligning their business strategy with climate-related commitments and targets.

Global financial institutions have large ESG mandates; these present significant new opportunities in green financing. However, to implement strategy and achieve the ESG mandates, it is essential that financial institutions navigate this complex landscape through effective data management, portfolio monitoring, risk management and regulatory compliance. Regulators across the globe are also highlighting the need for new regulations and mandatory minimum disclosure reporting requirements, which would help key stakeholders better assess ESG risk.