Treasury aims to boost banks' climate plans
The Treasury Department wants to improve the quality and consistency of Wall Street efforts to align finance with long-term "net-zero" emissions.
Driving the news: Treasury on Tuesday unveiled "Principles for NetZero Financing & Investment."
- The voluntary effort looks to promote "consistency and credibility" in the large numbers of banks and other financial institutions with targets.
- The goal of the "best practices" is aiding financial players that already have targets and those that set them going forward.
Why it matters: Private sector lending, underwriting and other services influence the trajectory of energy transition.
How it works: The Treasury document lays out nine principles, such as "credible metrics and targets," ensuring transparency on progress, and "robust" governance.
- Treasury also said several philanthropies including Bezos Earth Fund will provide $340 million combined.
- It's partly for research, data and technical resources to help financial players develop and execute commitments.
- A Treasury official said the money would not flow to banks but rather the "broad ecosystem" of non-governmental organizations (NGOs) and researchers working on the topic.
The intrigue: One section of the wide-ranging Treasury document urges institutions to consider "managed phaseout practices."
- That means "financing, investing, or advisory services that support a managed and accelerated transition from high-emitting to zero- or near-zero emissions assets."
The bottom line: The wording is delicate, but Treasury is looking to help enable movement away from fossil fuels.