U.S. Treasury Unveils Principles To Guide Financial Institutions' Net-Zero Commitments

On September 19, 2023, the U.S. Treasury Department introduced nine guiding principles for private sector financial institutions that have made net-zero commitments. The principles are intended to highlight and encourage the adoption of best practices and promote consistency and credibility in the approaches taken to set and achieve net-zero commitments. The "Principles for Net-Zero Financing & Investment" are also intended to help attract private sector capital to address the economic and environmental impacts of climate change.

The nine principles focus on Scope 3 greenhouse gas emissions, which generally comprise the majority of financial institutions' GHG emissions.

• Principle 1. A financial institution's net-zero commitment is a declaration of intent to work toward the reduction of greenhouse gas emissions. The Treasury Department recommends that commitments be in line with limiting the increase in the global average temperature to 1.5°C, consistent