The year of the climate transition plan for banks

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Here’s the intro from this Bloomberg Green article:

When it comes to climate action, banks have said a lot about the “what” (they’ll cut net emissions to zero), the “why” (it’s good for the planet, and for business) and even the “when” (they’ll hit net zero no later than 2050). But very few words have been spoken about the “how,” an omission that hasn’t gone unnoticed by investors on the lookout for greenwashing.

Until now that is.

This year a handful of major banks, including Citigroup Inc., Spain’s Banco Bilbao Vizcaya Argentaria SA (BBVA) and NatWest Group Plc in the UK, have published so-called transition plans. Scores of other major lenders are expected to follow suit before the year is out. In fact, Tony Rooke, head of transition finance at the world’s biggest climate finance coalition, the Glasgow Financial Alliance for Net Zero (GFANZ), says he expects 2023 to be “the year of the transition plan.”

Rather than adding more verbiage to an ever-expanding suite of sustainability disclosures, transition plans are supposed to explain in detail how 30-year goals will be achieved. They are meant to provide hard data for investors assessing whether a company can actually keep its word.

For Val Smith, Citigroup’s chief sustainability officer, the transition plan is the next step for net zero-targeting banks. Citi said in a report last month that it’s updating its initial transition plans while also assessing the preparedness of its high-carbon clients for a low-carbon world.