The Science Based Targets Initiative, a United Nations-backed initiative, is widely acknowledged as the benchmark for credible net-zero assertions.
The events were reported by Reuters earlier this week, highlighting that the lenders have abandoned their applications because of concerns that abiding by SBTi rules would limit their ability to finance fossil fuels.
Certain banks, such as Societe Generale and ABN Amro Bank, have also challenged the greenhouse gas emissions targets imposed by SBTi, which are deemed overly hard to fulfil, the finance press reported.
SBTi, which announced plans for a new standard applicable to financial institutions by 2024, was expected to mandate banks and asset managers to refrain from financing new fossil fuel projects.
A spokesperson from SBTi informed Reuters that, in response to feedback, certain requirements have been adjusted, allowing banks to still fund certain fossil fuel projects if they align with short-term emission targets. However, financing for fossil fuel projects that could impact their long-term emission goals will still be prohibited.
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Standard Chartered, a fourth finance company to withdraw from SBTi, explained in a statement that the new proposal “lacks sector guidance that adequately considers the transition of our clients and markets”.
Spokespersons at HSBC and ABN Amro have explained that their organisation will now rely on other bodies like the NZBA for target guidance. “SBTi isn’t the only standard-setter”, Bloomberg reported.