Net Zero Banking Assessment Framework methodology note - version 1.1

The Net Zero Banking Assessment Framework methodology note - version 1.1 outlines how banks are evaluated for their alignment with global climate goals, including the Paris Agreement. Building on version 1.0, a major update in this methodology is within Climate solutions (Area 6), wherein more detailed assessment criteria have been introduced, including:

• Clearer target design requirements
• Stronger expectations on methodological choices
• Improved reporting of financing and impact

There have also been refinements to decarbonisation strategy (Area 5) to clarify how banks are assessed on:

• Financing conditions for high-emitting sectors
• Alignment of portfolios with 1.5°C pathways
• Use of scenario analysis

Version 1.1 also clarifies how indicators should be interpreted, what qualifies as sufficient disclosure and edge cases observed in real bank data.

Developed in collaboration with the Institutional Investor Group on Climate Change (IIGCC) and Ceres, the framework assesses banks across 10 key areas, including net zero commitments, sectoral emissions targets, financed emissions disclosure, decarbonisation strategy, climate governance and just transition. It uses objective, disclosure-based indicators derived from publicly available data to ensure transparency, comparability and consistency across banks.

This version 1.1 update refines the original 2024 methodology, incorporating feedback from assessments and stakeholders while maintaining the core structure of the framework. It supports robust, investor-focused analysis of banks’ progress and provides a comprehensive tool for assessing the climate alignment and transition readiness of the global banking sector.