IIF Authors

Status: Will be live at 01/18/2023 09:39

Financing the Net-Zero Transition: From Planning to Practice

The transition to net-zero global greenhouse-gas (GHG) emissions by 2050 would require $275 trillion of investment in physical assets – and new analysis suggests that private financial institutions could facilitate as much as $3.5 trillion of annual financing between 2022 and 2050. By providing the right finance to the right place at the right time, banks and investors can drive innovation, support scaling, and avoid an unruly transition to a greener global economy. To pre-empt potential headwinds that may arise in the transition, financial institutions must establish processes, systems, and guardrails to manage risks, alongside efforts to maximize impact on climate outcomes. The task for all financial actors is to harness this opportunity while navigating significant strategic and operational demands in the context of evolving regulatory frameworks.

Developed with McKinsey, the IIF’s new report “Financing the Net-Zero Transition: From Planning to Practice” examines how financial institutions are rising to the transition finance challenge, as they seek to turn transition plans into tangible emissions reductions financing actions.