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EY professionals help financial services companies develop net-zero strategies that create long-term value, support emissions reductions, drive innovation and accelerate the transition to a low carbon future. The teams support clients to calculate financed emissions, set decarbonization targets, develop appropriate strategies and publish transition reports.
EY teams support financial services clients with a structured approach to develop a comprehensive decarbonization strategy across your financing and investment portfolio. We work in collaboration with sustainability sector specialists to support financial services clients at all stages of maturity.
A diagram that shows the approach for financial services organizations to achieve net-zero. Split into four key areas – Establish current emissions, develop decarbonization ambition and targets, design and implement decarbonization strategy, and communicate progress with a climate transition plan.
Supporting you to carry out a calculation of your current financed emissions. For financed emissions calculations this includes:
Understanding and mapping financed emissions, including identification of high emitting business units, sectors and/or asset classes.
Defining boundaries of financed emissions ownership.
Developing detailed approach and work plan based on identified boundaries.
Data collection, including assessment of current data availability, gaps, support with estimation techniques and proxies and due diligence on data.
Development of carbon footprint calculation methodology.
Carrying out financed emissions calculations and support to develop tooling and models.
Analysis of financed emissions greenhouse gas footprint to identify major sources of emissions.
Develop your net zero ambition and targets for decarbonizing financed emissions, including:
Creating a business case for decarbonization of financed emissions.
Setting ambitions and developing climate governance structures.
Determining appropriate decarbonization scenarios and transition pathways most appropriate for the book of business.
Defining decarbonization levers and assessment of whether this is sufficient to meet targets including:
Assessment of potential target-setting methodology approaches across asset classes and sectors.
Setting mid-term (2025 and 2030) and long-term (2050) financed emissions reduction targets aligned with the chosen transition pathway.
Setting targets for investment in climate services solutions.
Internal communications and employee engagement plan.
Design a financed emissions decarbonization strategy and operationalize this through a net-zero program, including:
Assessing suitability of decarbonization approaches across the portfolio, including engagement, divestment and scale up of climate solutions.
Prioritization of levers by (1) impact on emissions, (2) impact on risk, (3) cost and (4) impact on customers; resulting in a shortlist of feasible levers.
Setting up of a net-zero program, including operating model with workstreams for each lever in each business unit.
Develop and publish decarbonization policy, including stance on participation choices, engagement and explicit criteria for "green" financing, investments and/or insurance.
Communicate your financed emissions decarbonization approach and performance. Periodically review and adjust approach, including:
Develop internal metrics and monitoring mechanisms to track progress in relation to your decarbonization strategy.
Design of transition plan with respect to peer and market expectations.
Integration of transition plans into wider external sustainability reporting and disclosures.
To fund sector-specific net zero transition pathways, financial institutions need to deepen their knowledge of the businesses they finance. Read more here.
