CDP Technical Note: Financial Services Transition Plans and Net

CDP Technical Note: Financial Services Transition

Plans and Net Zero Commitments

CDP Climate change Questionnaire

Page 2 of 29

@cdp | www.cdp.net www.cdp.ne t

Executive Summary

In this technical note, we expand on CDP's existing research into credible climate transition

plans, by mapping additional disclosure indicators specifically for the financial sector. Our aim

is not to create new frameworks but to complement existing guidance and reporting

requirements by aligning them with transition plan guidelines and frameworks produced for

and by the sector. Additionally, we provide guidance on how financial institutions signatories

to the Glasgow Financial Alliance for Net Zero (GFANZ) sector-specific alliances can disclose

in line with their net zero commitments.

The financial sector plays a critical role in facilitating the transition to a net zero economy

through its financing of real economy activities. To enable transparent and comparable

baselines for action, financial institutions must disclose how they are embedding

environmental considerations across their businesses. As the regulatory landscape rapidly

also evolves, mandatory climate-related disclosures are being widely implemented, including

information on transition plans.

CDP offers a TCFD-aligned climate change questionnaire specifically designed for financial

institutions. This questionnaire incorporates science-aligned requirements, market needs, and

trends in corporate climate change reporting. It has evolved over time to accommodate various

frameworks such as the Investor Climate Action Plans (ICAPs) framework and net zero

commitments under the sector-specific alliances of GFANZ.

Many financial institutions have committed to achieving net zero emissions through the

GFANZ sector-specific alliances. These alliances require climate-related disclosures that

demonstrate progress towards net zero. Transition plans have gained prominence as a means

to translate commitments into accountable action. Since 2022, several guidelines and

frameworks for transition plans have been released for the financial sector by organizations

such as GFANZ, the Investor Agenda, and the United Nations High-Level Expert Group on

Net Zero Emissions Commitments of Non-State Entities. These have been mapped to the

climate change questionnaire for financial institutions and to the disclosure indicators of a

credible climate transition plan for the sector.

CDP remains committed to staying up to date with scientific requirements and participating in

the development of upcoming standards and regulatory requirements. The first iteration of this

Financial Services technical note serves as the initial guide for financial institutions to connect

their disclosures to the evolving landscape of net zero commitments and transition plans.

Going forward, CDP plans to publish a detailed technical note that outlines the alignment

between its questionnaires and the UK Transition Plan Taskforce's disclosure framework.

 
Page 3 of 29 
      @cdp | www.cdp.net www.cdp.ne        t                                                                                                                      
 
Contents 
 
CDP Technical Note: Financial Services Transition Plans and Net Zero 
Commitments ........................................................................................................... 1 
Version ................................................................................................................... 4 
1. Introduction .......................................................................................................... 5 
1.1 About this technical note ................................................................................... 5 
1.2 CDP’s Climate change questionnaire and evolving disclosure by financial 
institutions ............................................................................................................... 5 
1.3 Credible climate transition plans for financial institutions .................................. 8 
1.4 Principles for a credible climate transition plan ................................................. 9 
2. Financial sector guidance, recommendations, and requirements on net zero 
commitments and climate transition plans .......................................................... 11 
2.1 Financial services sector-specific net zero alliances ....................................... 11 
2.2 Investor Climate Action Plans ......................................................................... 11 
2.3 GFANZ Financial Institutions Net Zero Transition Plan Recommendations .... 12 
2.4 United Nations High-Level Expert Group Recommendations on Transition 
Plans ..................................................................................................................... 12 
3. Reporting against financial sector net zero commitments and action plans 13 
3.1 Reporting on climate transition plans for financial institutions ......................... 13 
Table 1: Climate Transition Plans for Financial Institutions ................................... 14 
3.2 Reporting Against Net Zero Commitments...................................................... 20 
Table 2: Net Zero Asset Managers Initiative (NZAM) Commitment – Disclosure 
Indicators .............................................................................................................. 21 
Table 3: Net-Zero Asset Owner Alliance (NZAOA) Commitment – Disclosure 
Indicators .............................................................................................................. 22 
Table 4: Net-Zero Banking Alliance (NZBA) Commitment – Disclosure Indicators 23 
Table 5: Net-Zero Insurance Alliance (NZIA) Commitment – Disclosure Indicators
 .............................................................................................................................. 24 
Table 6: Paris Aligned Asset Owners (PAAO) Commitment – Disclosure Indicators
 .............................................................................................................................. 25 
4. Appendix & references ...................................................................................... 27 
5. Useful Resources ............................................................................................... 29 
 
 
 
 

Page 4 of 29

@cdp | www.cdp.net www.cdp.ne t

Version

Version number

Release / Revision date

Revision summary

1.0

Released: May 26

, 2023

Publication of the Financial Services

Transition Plans and Net Zero

Commitments Technical Note

2.0

Revised: July 2023

Revision made to Table 2: Net Zero Asset

Managers initiative (NZAM) Commitment

– Disclosure Indicators

The copyright in this document is owned by CDP Worldwide, a registered charity number

1122330 and a company limited by guarantee, registered in England number

05013650.

Any use of any part of this document must be licensed by CDP. Any unauthorized use is

prohibited, and CDP reserves the right to protect its copyright by all legal means

necessary.

Page 5 of 29

@cdp | www.cdp.net www.cdp.ne t

1. Introduction

1.1 About this technical note

This technical note supports financial institutions disclosing to CDP through its climate change

questionnaire. It indicates how financial institutions can disclose in line with establishing

credible climate transition plans and net zero commitments, and how these suggestions map

to sectoral guidelines, as well as recommendations made by the United Nations High-Level

Expert Group on the Net Zero Emissions Commitments of Non-State Entities.

Section 1 provides an overview of CDP’s climate change questionnaire for financial services

companies and expands on CDP’s general reporting guidance to describe elements of a

credible climate transition plan for financial institutions, and associated disclosure indicators.

Section 2 provides context about:

Commitments set by financial sector-specific net zero alliances;

 Net Zero Asset Managers Initiative (NZAM)

 Net-Zero Asset Owner Alliance (NZAOA)

 Net-Zero Banking Alliance (NZBA)

 Net-Zero Insurance Alliance (NZIA)

 Paris Aligned Asset Owners (PAAO) [formerly known as the Paris Aligned Investment

Initiative, or PAII]

Disclosure guidelines relating to:

 The Investor Agenda’s Investor Climate Action Plans (ICAPs) Expectations Ladder;

 The Glasgow Financial Alliance for Net Zero (GFANZ)’s financial institutions net zero

transition plan recommendations;

 Transition plan recommendations from the United Nations High-Level Expert Group on

the Net Zero Emissions Commitments of Non-State Entities.

In section 3, Table 1 provides a mapping of CDP’s elements of a credible climate transition

plan for financial institutions to guidelines by the GFANZ, UN HLEG, and Investor Agenda

(ICAPs). Tables 2-6 provide a mapping of net zero commitment statements by financial sector-

specific net zero alliances to the CDP climate change questionnaire.

Section 4 provides further resources to supplement the information detailed in this technical

note.

1.2 CDP’s Climate change questionnaire and evolving

disclosure by financial institutions

The structure of the CDP climate change questionnaire is designed to incorporate climate

science-aligned requirements alongside market needs and trends in corporate climate change

reporting, including the integration of sector-specific questions for the financial services (FS)

Page 6 of 29

@cdp | www.cdp.net www.cdp.ne t

sector

. Organizations in the FS sector should respond to the CDP questionnaire

in the

context of their financing activities, in addition to their operational activities where appropriate.

They are presented with sector-specific climate change questions and modifications to

existing climate change questions, and provided with specific reporting guidance clarifying the

type of information that banks, investors (asset managers / asset owners) and insurance

companies should consider in their response.

CDP’s financial services questions focus on the following topics:

 Governance of climate strategy, transition plans, and their implementation

 Portfolio exposure to environmental risks and opportunities;

 Environmental issues in the organization’s policy framework;

 Engagement with clients and investee companies;

 Financed emissions, in line with the Partnership for Carbon Accounting Financials

Global GHG Accounting and Reporting Standard for the Financial Industry, and

additional portfolio impact metrics;

 Portfolio alignment to 1.5-degree world; and,

 Shareholder voting on environmental issues.

CDP recognizes the important role of the Taskforce on Climate-Related Financial Disclosures

(TCFD) in mainstreaming climate-related information and advancing the availability of

financially relevant information for global markets. Its recommendations ensure climate-

related information is integrated into mainstream financial reports, providing transparency and

a roadmap for meeting the temperature commitments of the Paris Agreement. CDP committed

to align its questionnaires with the TCFD’s recommendations, alongside the sectoral focus

and adopting a forward-looking approach to climate-risk disclosure. This harmonization

continues to help to drive the adoption of TCFD recommendations by reporting companies,

optimizing the reporting burden, and speeding-up the generation of decision-useful

information for data users.

The TCFD recommendations highlight the important role of the financial sector as preparers

of environmental disclosures. Disclosure by this sector enables investors, central banks,

regulators/supervisors, and other relevant stakeholders to better understand the

concentrations of carbon-related assets in the financial sector and the financial system’s

exposures to environmental risks through activities such as lending, financial intermediary,

investment and/or insurance underwriting.

A fast-evolving regulatory landscape has accelerated the need for standardized climate-

related disclosures, including information related to the net zero transition. Building on the

momentum from COP26 (which outlined the influence of non-state actors on accelerating

action for a transition towards a 1.5°C world), COP27 led to significant announcements

indicating the need for organizations to disclose their plans and progress towards net zero, in

preparation for regulatory change. This included recommendations by the UN High-Level

Expert Group on Net Zero Emissions Commitments of Non-State Entities, which are set to

harmonize claims by campaigns and initiatives and underpin a wave of net zero oriented

regulations around the world. For the financial sector in particular, this evolution will continue

as emerging standards and jurisdictional regulations position disclosure of portfolio-related

Scope 3 emissions as particularly significant. Key examples include:

Activities in the financial services sector that are covered include banking, investing (asset

management and/or asset ownership) and insurance underwriting.

All question numbers in the general climate change questionnaire begin with the letter C. Introduced

in 2022, question numbers in the new forests and water module for financial services organizations

only, begin with the letters FW. Questions that are unique to companies in the financial sector are

labelled using “FS” within the question number.

Page 7 of 29

@cdp | www.cdp.net www.cdp.ne t

 The UK Transition Plan Taskforce’s draft Disclosure Framework and accompanying

Implementation Guidance provides recommendations for financial institutions to

develop gold-standard transition plans. Under current UK reporting rules, many asset

owners and asset managers are required by UK regulators and the government to

make TCFD-aligned disclosures – which has continually evolved as the TCFD has

updated its guidance to reflect thought leadership on net zero transition frameworks.

These requirements have been extended to the setting of transition plans.

 The International Financial Reporting Standards (IFRS), through the International

Sustainability Standards Board (ISSB), released exposure drafts for its Sustainable

Disclosure Standards, and the European Financial Reporting Advisory Group

(EFRAG) approved the first set of European Sustainability Reporting Standards

(ESRS), including its proposed disclosure recommendations on transition plans and

scope 3 disclosures, including financial investments. The EU’s Corporate

Sustainability Reporting Directive, together with the EU Sustainability Reporting

Standards developed by EFRAG, will require large companies (more than 500

employees) to disclose on their transition plans for climate change mitigation and their

plans to ensure that their business model and strategy are compatible with the respect

of planetary boundaries of the biosphere integrity and land-system change.

Companies previously covered by the NFRD (Non-Financial Reporting Directive) will

have to start disclosing in 2025 on FY 2024, whilst other large & listed companies will

be required to disclose transition plans the following year.

 The US Securities and Exchange Commission’s proposed rule largely tracks the

Task Force on Climate-Related Financial Disclosures (TCFD), including reference to

transition plans. In its proposed rule, the SEC recognizes CDP’s important role in

implementing the TCFD recommendations: “the CDP questionnaire fully incorporates

the TCFD framework and thus exhibits full alignment.”

Transition plans are also a topic of interest for prudential supervisors looking to assess,

monitor and address bank’s alignment with the net zero transition. The strategic importance

of transition plans to prudential supervisors has been acknowledged by prominent central

bankers, as a mechanism for banks to step up their risk management capabilities. This is an

area of potential growth for increasingly stringent supervisory expectations and regulations in

the future.

With many emerging mandatory regulations and standards modelled on the TCFD

recommendations and the GHG Protocol, companies disclosing through CDP are well

prepared for compliance. CDP will incorporate the ISSB’s IFRS S2 Climate-related Disclosure

Standard into its global environmental disclosure platform, rapidly scaling the global adoption

of the standard in advance of it becoming regulation.

Disclosure through CDP’s Climate change questionnaire for the Financial Sector allows

financial institutions to meet the gold standard in environmental reporting, including:

 Enhancing transparency that in turn demonstrates a commitment to sustainability,

and gain recognition for a commitment to climate and environmental action;

 Getting ahead of regulation by fulfilling the recommendations of the TCFD

(actionable metrics, risks and opportunities);

 Improving business risk awareness and long-term resilience, identifying financial

savings, and enhancing reputation and shareholder confidence;

 Spurring ambition concerning portfolio impacts and preparedness for the transition

towards a 1.5-degree, nature positive future;

 Enabling data to be shared with multiple stakeholders through one submission.

See The Enhancement and Standardization of Climate-Related Disclosures by Securities and

Exchange Commission, page 314.

 
Page 8 of 29 
      @cdp | www.cdp.net www.cdp.ne        t                                                                                                                      
Companies disclosing robustly to  CDP  have  been  shown  to  increase their  environmental 
ambition over time  by  leveraging  CDP’s framework to  identify  best  practice and determine 
next steps in their environmental journey. As CDP’s questionnaire has been mapped against 
various net zero and transition plan frameworks for financial institutions, disclosing enables 
an organization to demonstrate alignment with the recommendations from leading industry 
alliances,  initiatives,  and  frameworks,  and  CDP  recommends  comprehensive  disclosure 
across all elements of the questionnaire to display leadership in environmental reporting.   
 
Note that the mapping below references only the Climate change questions in the CDP climate 
change questionnaire for the financial sector. In 2022, CDP added a module to the end of the 
Climate change questionnaire for organizations in the financial sector to disclose information 
on  the  topics  of  forests  and  water  security,  as  well  as  several  high-level  questions  on 
biodiversity for all corporates. These topics are beyond the scope of this document – future 
iterations will be updated to reflect the evolving consensus on nature-related disclosures for 
financial institutions.  
 
With deforestation and water security both posing substantial financial risks to companies and 
their financiers and given that there are no routes to a 1.5°C future without tackling climate 
and nature together, disclosing financial institutions are strongly encouraged to complete the 
forests and water-related questions where applicable. Those that are taking steps to assess 
and mitigate these relevant and material risks will be well placed to prosper as the global 
economy shifts to account for nature-related impacts and dependencies. 
 
The  TNFD  framework  and  emerging  guidance  for  nature-related  financial  disclosures 
(forthcoming  in  2023)  support  the  implementation  of  target  15  of  the  Global  Biodiversity 
Framework  agreed  at  the  2022  UN  Biodiversity  Conference.  CDP  annually  reviews  its 
questionnaires in line with the latest environmental science and is well-positioned to accelerate 
the implementation of target 15, and to track progress.  
 
1.3 Credible climate transition plans for financial institutions 
 
CDP’s discussion paper and technical note, which are the outcome of an extensive technical 
review of leading guidance in this space, outline the key elements of a sector-neutral credible 
climate transition plan and  the  associated  disclosure  elements  via  CDP’s  climate  change 
questionnaire.  CDP  has  since  identified  additional  sector-specific  indicators  for  financial 
institutions and mapped each of them to this existing framework.  
 
Across 2022 and 2023, various transition plan guidelines and frameworks have been released. 
This technical note does not intend to create a new framework – instead, we have identified 
sector-specific indicators for financial institutions and mapped each of them to CDP’s existing 
guidance for disclosing credible climate transition plans, per Section 3.1 and Table 1.  
 
Financial institutions that are Capital Markets signatories to CDP can find out more about 
disclosure data pertaining to the transition plans of real economy companies through their 
account  managers.  Transition  plan  indicators  are  also  included  as  part  of  the  CDP 
Temperature Ratings dataset. 
 
Following the definition and principles of a credible climate transition plan from our technical 
note:  
 
A  credible  climate  transition  plan  is  a  time-bound  action  plan  that  outlines  how  an 
organization  will  achieve  its  strategy  to  pivot  its  existing  assets,  operations,  and  entire 
business  model  towards  a  trajectory  aligned  with  the  latest  and  most  ambitious  climate 

Page 9 of 29

@cdp | www.cdp.net www.cdp.ne t

science

recommendations. i.e., halving greenhouse gas (GHG) emissions by 2030 and

reaching net-zero by 2050 at the latest, thereby limiting global warming to 1.5°C.

Based on CDP data and research into established frameworks, CDP considers a credible

climate transition plan to be defined by the five following characteristics:

 It supports a strategy for the climate transition, i.e., actions that need to occur for an

organization to pivot towards a 1.5°C world, with near-term (five to ten-year) science-

based targets (emissions reduction targets in line with 1.5°C pathways), and then long-

term science-based targets (SBTs) (for 2050 at the latest)

 It contains verifiable and quantifiable key performance indicators (KPIs) which:

o measure the success of an organization’s climate transition; and

o are tracked regularly.

 It is succinctly integrated into an organization’s existing mainstream filings (in annual

financial reporting/sustainability reporting/overall business strategy)

, and provides an

accountability mechanism

 It is guided by the principles outlined in section 1.4

 It contains the key elements outlined in Table 1, which are the outcome of an extensive

technical review.

These criteria demonstrate that an organization is aligning with ambitious long-term climate

goals, and that its business model will transition, in order to be relevant (i.e., profitable) in a

1.5°C world. To avoid potential regulatory shocks, organizations should aim to align, as a

minimum, with relevant Paris-aligned policy goals for where the organization operates (this

includes direct and value chain operations). Given the number of countries that have

committed to net-zero emissions, it is critical that stakeholders are able to assess an

organization’s plans to align with such a future (refer to NetZero tracker).

1.4 Principles for a credible climate transition plan

CDP has developed six fundamental principles that will guide the preparation of a credible

climate transition plan:

1. Accountability: The plan has clearly defined roles and responsibilities. This includes

effective governance mechanisms, where the board and C-suite executives are

accountable for implementation of the plan.

2. Internally coherent: The plan is integrated into the business strategy and financial

planning of the organization.

3. Forward looking: The plan should reflect considerations of the short- and long-term,

trending towards 2050. However, an emphasis on the short-term (the next 5-year

timeframe) is critical to achieve long-term climate ambitions, which should be

supported by governance mechanisms (new or existing).

4. Time bound and quantitative: The plan’s KPIs are quantifiable and are outlined for

defined timeframes.

As communicated by the Intergovernmental Panel on Climate Change (IPCC) and the Science

Based Targets initiative (SBTi).

The exact reporting system utilized may vary by organization. For better accountability, (1) ease of

integration and (2) reporting frequency should be the key factors used to assess where to integrate the

transition plan.

Page 10 of 29

@cdp | www.cdp.net www.cdp.ne t

5. Flexible and responsive: The plan is reviewed and updated regularly

, with a defined

stakeholder feedback mechanism in place (e.g., shareholders, at AGMs).

6. Complete: The plan covers the whole organization and its value chain, i.e., any

exclusions from the plan must not be material to the organization and/or its impact on

the natural environment (ensuring the double materiality principle applies to disclosure

of exclusions).

In alignment with the 2021 update to the TCFD’s recommendations, with its integration of transition

plans, transition plans should at a minimum be reviewed every five years for continuous relevancy and

efficacy and updated if required. The TCFD also notes that progress against the plans should be

reported annually, alongside any material, substantive changes to the plan be reported annually (if

required).

Page 11 of 29

@cdp | www.cdp.net www.cdp.ne t

2. Financial sector guidance, recommendations, and

requirements on net zero commitments and climate

transition plans

This section outlines the context about initiatives and their requirements and/or guidance,

which have been mapped to CDP’s climate change questionnaire and to the disclosure

elements associated with a credible climate transition plan for financial institutions.

2.1 Financial services sector-specific net zero alliances

As of January 2023, over 550 firms are members of sector-specific net zero alliances across

the global financial sector. These independent alliances were brought together as part of the

Glasgow Financial Alliance for Net Zero (GFANZ), and each have established membership

criteria which includes the commitment to net zero by 2050, in addition to setting interim

targets for 2030 or earlier and reporting transparently on progress along the way.

CDP has mapped the commitments of five of these alliances to CDP’s 2023 climate change

questionnaire:

 Net Zero Asset Managers Initiative (NZAM)

 Net-Zero Asset Owner Alliance (NZAOA)

 Net-Zero Banking Alliance (NZBA)

 Net-Zero Insurance Alliance (NZIA)

 Paris Aligned Asset Owners (PAAO) [formerly known as the Paris Aligned Investment

Initiative, or PAII]

2.2 Investor Climate Action Plans

The Investor Agenda is a coalition of seven major NGO groups working with investors,

collaborating to develop investor guidance to tackle the climate crisis. They have developed

the Investor Climate Action Plans (ICAPs) Expectations Ladder and Guidance, to provide

institutional investors with clear expectations for issuing and implementing climate action plans

in line with net zero by 2050.

The Investor Agenda outlines that the Ladder and Guidance can be used by investors to: (1)

assess their current approach to managing climate change risk and opportunity; (2) publish a

standalone ICAP; (3) embed elements of the ICAPs into their climate change strategies and

disclosures; (4) communicate their current activities and plans to stakeholders.”

Financial institutions can disclose their ICAPs through CDP’s Climate change questionnaire

in line with ICAPs Expectations Ladder and Guidance.

The following publicly available documents that outline the commitments of each alliance have been

used for this mapping: NZAM, NZAOA, NZBA, NZIA, PAAO. These alliances have, in some cases,

provided more detailed implementation guidance for net zero and portfolio target setting, which is not

the subject of this document.

Page 12 of 29

@cdp | www.cdp.net www.cdp.ne t

2.3 GFANZ Financial Institutions Net Zero Transition Plan

Recommendations

In November 2022, GFANZ published voluntary recommendations and guidance to support

financial institutions with the development and execution of net zero transition plans. This

includes a framework for financial institutions’ transition plans. accompanied by suggestions

of possible disclosure content for transition plans, which they note are not detailed

recommendations.

By analysing GFANZ disclosure suggestions outlined by GFANZ, the mapping in Table 1

indicates which sub-component of the GFANZ framework aligns to CDP’s elements of a

credible climate transition plan for financial institutions.

2.4 United Nations High-Level Expert Group Recommendations

on Transition Plans

The UN-established High-Level Expert Group on the credibility and accountability of net zero

emissions commitments of non-state entities released a landmark report in November 2022.

The report offers ten recommendations for what non-state actors, including financial services

institutions, must do through each stage of their progress towards net zero. Notably, this

includes publishing transition plans. The mapping in Table 1 outlines how CDP’s Climate

change questionnaire maps to the “Detailed Recommendations” noted in the section of the

report titled Recommendation 4: Creating a Transition Plan.

Page 13 of 29

@cdp | www.cdp.net www.cdp.ne t

3. Reporting against financial sector net zero

commitments and action plans

The following section outlines how the CDP Climate change questions for financial services

companies map to specific net zero commitment and climate transition plans

3.1 Reporting on climate transition plans for financial

institutions

CDP’s climate change questionnaire collects data on climate transition plan elements. Building

on sections 1.3 and 1.4, Table 1 below maps the 2023 CDP climate change questions for

financial institutions to the key elements of a credible climate transition plan for financial

institutions, and to the guidance from GFANZ, the Investor Agenda ICAPs, and the UN HLEG.

Financial institutions can disclose through CDP’s climate change questionnaire against the

following indicators, to demonstrate that their efforts to transition to a 1.5°C world are in line

with having a credible climate transition plan.

Additionally, using the mapping below, organisations can see at a high-level, how each of

these disclosure elements map to the guidance noted above, to disclose in alignment with the

details suggested by these organisations.

CDP disclosure captures the GFANZ and ICAPs

recommendations, thereby providing the platform for comprehensive disclosure.

Please note that we have abbreviated the UN HLEG Recommendation for creating a transition

plan to a set of reference indicators (UN4.1 – UN4.19). The full recommendation text along

with the indicators referenced in Table 1 are available via Appendix A.

This mapping has been conducted by CDP, to support financial services companies to disclose

comprehensively whilst simultaneously seeing how the questionnaire maps to various net zero and

transition plan related requirements and guidelines. Within these, some requirements are high-level and

do not have publicly available guidance for how to report against them. This mapping is therefore

intended to be used only as a reference point by financial institutions to support them in meeting various

external requirements and displaying environmental leadership by disclosing to CDP.

This table also includes the mapping to the ICAPs Expectations Ladder, which is primarily aimed at

asset managers and asset owners. Note that the broader guidance in Table 6 applies to a broader

range of financial institutions – including, but not limited to, banks and insurers.

Page 14 of 29 @cdp | www.cdp.net www.cdp.ne

Table 1: Climate Transition Plans for Financial Institutions

CDP Climate

Transition Plan

Element

Aligned 2023

CDP

Question

Number for

Financial

Services

Relevance

TCFD Pillar

ICAPs Expectations

Ladder

GFANZ Transition

Plan Disclosure

Sub-Components

UN High-Level Expert

Group

Recommendations

Governance

C1.1, C1.1a,

C1.1b (Board

level

oversight)

To ensure accountability for developing an

ambitious plan as well as implementation

of the plan’s ambitions, board level

oversight of the climate transition plan is

crucial in steering business strategy

towards a 1.5°C aligned trajectory.

Governance

Governance:

- Policy Tiers 1, 2 & 3

- Accountability Tiers 3 & 4,

- Board Reporting Tiers 1,

2 & 3

Governance: Roles,

responsibilities and

remuneration

UN4.10: Governance

C1.1d (Board

expertise on

climate related

issues)

Addressing climate change requires

specific expertise related to climate change

and its impacts, and the potential direct

and indirect effects on the business.

Ensuring this capability exists within

governance structures indicates an

organization’s competence in delivering on

its climate transition plan and increases the

chance of success.

Governance:

- Policy Tiers 1

- Accountability Tiers 2

- Skills Assessment Tiers

1, 2 & 3

Governance: Skills

and culture

UN4.10: Governance

C1.2

(Executive

management

accountability

& feedback

mechanisms)

Executive management have responsibility

for (1) developing a climate transition plan,

and (2) frequently reporting to the board on

progress towards realizing the plan’s

ambitions.

Governance:

- Policy Tiers 1 & 2

- Accountability Tier 4

- Board Reporting Tiers 1 &

Governance: Roles,

responsibilities and

remuneration

UN4.10: Governance

C1.3, C1.3a

(Executive

incentives

linked to

climate

performance

indicators)

To incentivize conscious action and

commitment in implementing the plan, it is

recommended that executive management

incentives are linked to climate

performance indicators.

Governance:

- Accountability Tier 1

Governance: Roles,

responsibilities and

remuneration

UN4.10: Governance

GFANZ recommendations also stipulate that disclosers should provide a summary of access to climate-related resources, and the resource requirements

and a change management program needed to embed transition plan elements into culture and practice.

Page 15 of 29 @cdp | www.cdp.net www.cdp.ne

Scenario

Analysis

C3.2, C3.2a,

C3.2b (Details

of scenario

analysis)

Scenario analysis is used as a strategic

tool to inform the development of the

climate transition plan, based on several

potential future climatic states.

Strategy

Investment:

- Risk Management Tiers

1, 2, & 3

Implementation

strategy: activities &

decision making

UN4.4: Sectoral

pathways

Strategy to

achieve Net

Zero

C3.1

(Existence of a

"1.5C world"

aligned

transition plan

within

business

strategy &

shareholder

feedback)

An organization’s climate transition plan

should:

- be aligned with a 1.5°C world: to signal

climate ambition.

- be publicly available: to demonstrate

transparency.

- integrated into the business strategy: to

fulfil the principle of internal coherence.

- have a defined shareholder feedback

mechanism: to incentivize regular

feedback collection.

Governance:

- Policy Tier 3

- Planning and Evaluation

Tiers 1, 2, 3 & 4

Foundations:

Objectives and

priorities

UN4.1: Transition plan

disclosure

UN4.11: Assumptions

and expectations

C3.3, C-FS3.6,

C-FS3.6a, C-

FS3.7, C-

FS3.7a, C-

FS3.8, C-

FS3.8a (Link

between

identified (and

potential)

climate related

risks,

opportunities &

company

strategy)

Here, organizations can explain how

climate-related risks and opportunities

influenced their strategy and climate

transition plan, elaborating on the

implementation through the use of policy

frameworks and requirements that align

business activities with the net zero

transition plan.

Investment:

- Strategy Tiers 1, 2, 3 & 4

- Asset Allocation Tiers 1,

2, 3

- Additional Target Setting

Tiers 2

Corporate Engagement:

- Collective / Collaborative

Engagement Tiers 1 & 2

- Bilateral Engagement

Tiers 1, 2 & 3

- Corporate Escalation and

Shareholder Engagement

Tiers 1, 2 & 4

Governance:

- Policy Tier 4

Foundations:

Objectives and

priorities

Implementation

strategy: products

and services,

activities and

decision-making,

policies and

conditions

UN4.16: Strategy and

implementation

GFANZ elaborates on the need for detail around the use of carbon credits towards interim and final targets, and after the net-zero target is reached. It also

asks for details pertaining to a Managed Phaseout plan. These are all implicit within CDP’s notion of disclosing comprehensively in line with a credible climate

transition plan, and these details can be attached through disclose to question C3.1.

The UN HLEG recommendations outline that businesses should explain how they are contributing to just transition considerations as part of their transition

plans. They recommend that transition plans consider the social consequences and impacts of mitigation actions, including on race, gender, and

intergenerational equity.

Page 16 of 29 @cdp | www.cdp.net www.cdp.ne

- Accountability Tier 2

- Planning and Evaluation

Tier 4

Financial

Planning

C3.4, C3.5,

C3.5a

(Financial

planning

details

associated

with a 1.5C

world)

Financial planning is crucial when

demonstrating that an organization is

aligning with climate goals (as elaborated

in its climate transition plan), and that it will

be relevant (i.e., profitable) in a 1.5°C

world. Organizations can use these CDP

questions to demonstrate how they have

aligned their financial planning with their

climate transition plan in the reporting year

and at milestone years ‘2025’ and ‘2030’.

Financial details may describe revenue,

CAPEX, and/or OPEX projections which

are crucial for realizing the plan’s ambition.

Investment:

- Asset Allocation Tiers 1, 2

& 3

Governance:

- Accountability Tier 2

- Planning and Evaluation

Tier 4

Foundations:

Objectives and

priorities

Implementation

strategy: activities

and decision-

making

UN4.7: Aligned

spending and revenue

UN4.16: Strategy and

implementation

UN4.19: Solution

financing

C-FS4.5, C-

FS4.5a (Low

carbon

products or

services)

Organizations can develop their existing

and new products or services to support

clients and portfolio companies' efforts to

transition, and ultimately to decarbonize

their portfolios over time, all towards a

1.5°C trajectory.

Investment:

- Asset Allocation Tier 4

Foundations:

Objectives and

priorities

Implementation

strategy: products

and services

UN4.5: Emissions

reductions and

removals

UN4.16: Strategy and

implementation

UN4.19: Solution

financing

Policy

engagement

C12.3,

C12.3a,

C12.3b,

C12.3c

(Alignment of

public policy

engagement

with climate

ambition &

strategy)

Ensuring that an organization’s climate

transition plan is supported by fully aligned

external policy engagement (policy, law,

regulation, and trade associations)

demonstrates an ambitious effort towards

achieving a 1.5°C world. For many

organizations, a successful climate

transition will depend on an

accommodative policy landscape, thus

companies should advocate for climate-

positive policies that impact their relevant

sector(s) and are consistent with their

climate transition plan. Organizations

should also lobby against climate-negative

Corporate Engagement:

- Bilateral Engagement Tier

Policy Advocacy:

- Investor Statements Tiers

1, 2, 3 & 4

- Lobbying Tiers 1, 2, 3 & 4

- Advocacy Tiers 1, 2, 3 &

Engagement

strategy:

government and

public sector

UN4.8: Addressing

data limitations

UN4.15: Lobbying and

policy engagement

Page 17 of 29 @cdp | www.cdp.net www.cdp.ne

policies which could affect their ability to

transition.

Value chain

engagement &

Low-carbon

initiatives

C4.3b (Low

carbon

initiatives -

direct

operations)

One of the key elements of a climate

transition plan is that it contains time-

bound actions to decarbonize business

processes and implement emissions

reduction initiatives.

Investment:

- Additional Target Setting

Tier 3

Disclosure:

- Commitments, Objectives

& Targets Tier 3

UN4.5: Emissions

reductions and

removals

C12.1,

C12.1a,

C12.5, C-

FS12.1b, C-

FS12.1c, C-

FS12.2, C-

FS12.2a

(Value chain

engagement)

Financial institutions can only achieve

science-based net zero targets through the

decarbonization of their portfolios; hence,

value chain engagement plays a significant

role in realizing a climate transition plan.

Through their engagement with clients and

portfolio companies, by exercising voting

rights as shareholders, and through

collaborative industry engagements,

financial institutions can support and

motivate a wider credible transition to net

zero.

Investment:

- Strategy Tiers 2 & 3

- Asset Allocation Tiers 1, 2

& 3

- Additional Target Setting

Tier 2

Corporate Engagement:

- Collective/ Collaborative

Engagement Tiers 1 & 2

- Bilateral Engagement

Tiers 1, 2, 3 & 4

- Corporate Escalation and

Shareholder Engagement

Tiers 1, 2, 3 & 4

Engagement

strategy: clients and

portfolio companies,

industry

UN4.6: Value chain

action

UN4.8: Addressing

data limitations

UN4.18: Stewardship,

offsets, and risk

management

Risks &

Opportunities

C2.1, C2.2, C-

FS2.2b, C-

FS2.2c, C-

FS2.2d, C-

FS2.2e

(Process for

identifying

climate related

risks &

opportunities)

To demonstrate forward planning (which is

crucial for a climate transition plan), an

organization’s transition plan should

include or reflect a process for identifying,

assessing, and responding to climate

related risks and opportunities. This should

focus in particular on risks and

opportunities that financial institutions are

exposed to through their portfolios.

Risk

Management

Investment:

- Risk Management Tier 4

Foundations:

Objectives and

priorities

UN4.16: Strategy and

implementation

UN4.18: Stewardship,

offsets, and risk

management

CDP has not listed here the full list of sub-elements within the Disclosure tier of the ICAPs Expectations Ladder, as these apply widely across the whole

CDP questionnaire. They are noted here to indicate the alignment between CDP’s elements of a credible climate transition plan, and to the ICAPs framework.

Page 18 of 29 @cdp | www.cdp.net www.cdp.ne

C2.3, C2.3a

(Climate

related risks -

risks, potential

financial

impact and

response

strategy)

Details of the risks posed to an

organization by climate-related issues, and

the estimated potential financial impact of

these risks at the corporate level, as well

as the response strategy to manage these

risks.

*Disclosure:

- Portfolio Assessment Tier

Foundations:

Objectives and

priorities

UN4.16: Strategy and

implementation

C2.4, C2.4a

(Climate

opportunities -

opportunities,

potential

financial

impact and

response

strategy)

Details of the opportunities posed to an

organization by climate-related issues, and

the estimated potential scale of these

opportunities at the corporate level as well

as the response strategy required to take

advantage of these opportunities.

*Disclosure:

- Portfolio Assessment Tier

Foundations:

Objectives and

priorities

UN4.1: Transition plan

disclosure

Targets

C4.1, C4.1a,

C4.1b, C-

FS4.1d

(Emissions

reduction

targets -

absolute &

intensity)

The plan includes near- and long-term,

verified science-based targets, including

for their portfolios and all financed

emissions, which are in line with the latest

climate science to reach a 1.5°C world,

with time-bound KPIs. Where this is not

feasible, the targets should align to CDP

recommended best practice.

Metrics &

Targets

Investment:

- Alignment Target Tiers 1,

2 & 3

- Additional Target Setting

Tiers 1, 2 & 3

Metrics and targets

UN4.2: Targets

UN4.12: Annual

reporting

C4.2a, C4.2b

(Other climate

targets)

Ambitious climate transition plans will

include other climate related targets,

including, but not limited to, increased low-

carbon energy consumption or production

targets.

Investment:

- Alignment Target Tiers 1,

2 & 3

- Additional Target Setting

Tier 1

Metrics and targets

UN4.2: Targets

UN4.14: Natural

ecosystems

See footnote 13.

Opportunity assessment and management are implicitly part of a comprehensive transition plan. These relate in particular to research and development

aspect denoted within UN4.1.

Organisations can disclose various targets pertaining to their management of natural ecosystems within C4.2b. More generally, with deforestation and water

security both posing substantial financial risks to companies and their financiers and given that there are no routes to a 1.5°C future without tackling climate

and nature together, disclosing financial institutions are encouraged to complete the forests and water-related questions where applicable, to comprehensively

indicate the alignment of their actions to protect natural ecosystems. They can do so via the FW-FS module at the end of the climate change questionnaire.

Page 19 of 29 @cdp | www.cdp.net www.cdp.ne

C4.2c (Net-

zero targets)

The plan includes a net zero target, in line

with the latest climate science, with time

bound KPIs. Third-party verification is

considered best practice.

Investment:

- Alignment Target Tiers 1

& 2

- Additional Target Setting

Tier 1

Foundations:

Objectives and

priorities

Metrics and targets

UN4.2: Targets

UN4.5: Emissions

reductions and

removals

UN4.17: Net zero

across all asset classes

and services

Scope 1, 2 &3

accounting

with verification

C5.2, C6.1,

C6.3, C6.5,

C10.1a,

C10.1b,

C10.1c, C-

FS14.1, C-

FS14.1a, C-

FS14.1b, C-

FS14.1c

(Comprehensi

ve and third-

party verified

emissions

accounting)

A climate transition plan should be

accompanied by a complete, accurate,

transparent, consistent, and relevant

inventory of all three scopes of emissions.

Any individual organization may find it

important to fully disclose to C5 – C10 and

C14, with an emphasis on portfolio

emissions and other portfolio impact

metrics.

• Third-party verification is necessary for

credibility and transparency on progress

against a climate transition plan.

• Companies should calculate and disclose

all material categories of scope 3 and

provide an explanation for categories that

are not relevant.

Investment:

- Alignment Target Tiers 1

& 4

Metrics and targets

UN4.2: Targets

UN4.3: Verification

UN4.12: Annual

reporting

Key:

Full coverage: There is full coverage of the disclosure recommendations set by this framework by CDP’s climate change questionnaire,

via the components noted in the box. I.e. CDP’s questionnaire meets (and in some cases, exceeds) the disclosure recommendations set by this

framework.

Partial coverage: There is partial coverage between CDP’s climate change questionnaire and the disclosure recommendations set by

this framework. At a high-level, any key differences are noted as footnotes.

Not applicable: The mapped framework does not require the disclosure of this information, whereas CDP’s questionnaire does.

Page 20 of 29

@cdp | www.cdp.net www.cdp.ne t

3.2 Reporting Against Net Zero Commitments

Tables 2-6 list each section of the net zero commitments of NZAM, NZAOA, NZBA, NZIA and

PAAO, providing a list of relevant questions in CDP’s climate change questionnaire.

Organisations can use this list to disclose information relevant to their net zero commitments

made with these alliances.

Note that NZAM and PAAO include commitments to reporting in line with the TCFD

recommendations. CDP has published a detailed technical note mapping all TCFD-aligned

climate change questions, which can be used alongside this technical note. For brevity, the

TCFD-aligned questions have not all been listed in this document. The specific parts of these

commitments are:

 NZAM Commitment 10: Publish TCFD disclosures, including a climate action plan,

annually, and submit them to the Investor Agenda via its partner organisations for

review to ensure the approach applied is based on a robust methodology, consistent

with the UN Race to Zero criteria, and action is being taken in line with the

commitments made here.

 PAAO Commitment 10: Reporting annually on the strategy and actions implemented

and progress towards achieving objectives and targets, and in line with the Task

Force on Climate-related Financial Disclosures (TCFD) recommendations.

Page 21 of 29 @cdp | www.cdp.net www.cdp.ne

Table 2: Net Zero Asset Managers Initiative (NZAM) Commitment – Disclosure Indicators

Net Zero Asset Managers Initiative (NZAM) Commitment

2023 CDP Questions for

the Financial Services

sector

My organisation commits to support the goal of net zero greenhouse gas (‘GHG’) emissions by 2050, in line with global

efforts to limit warming to 1.5°C (‘net zero emissions by 2050 or sooner’). It also commits to support investing aligned

with net zero emissions by 2050 or sooner.

a. Work in partnership with asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero

emissions by 2050 or sooner across all assets under management (‘AUM’).

b. Set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by

2050 or sooner.

c. Review our interim target at least every five years, with a view to ratcheting up the proportion of AUM covered until

100% of assets are included.

C-FS4.1d, C4.2c, C-FS12.1b,

C12.5

1. Set interim targets for 2030, consistent with a fair share of the 50% global reduction in CO2 identified as a requirement

in the IPCC special report on global warming of 1.5°C.

C4.1, C4.1a, C4.1b, C-FS4.1d

2. Take account of portfolio Scope 1 & 2 emissions and, to the extent possible, material portfolio Scope 3 emissions.

C-FS14.1, C-FS14.1a, C-

FS14.1b, C-FS14.1c

3. Prioritise the achievement of real economy emissions reductions within the sectors and companies in which we invest.

C-FS2.2b, C-FS2.2c, C-

FS3.6a, C4.3c, C-FS12.1c, C-

FS14.3, C-FS14.3a

4. If using offsets, invest in long-term carbon removal, where there are no technologically and/or financially viable

alternatives to eliminate emissions.

C3.5, C3.5a, C11.2, C11.2a

5. As required, create investment products aligned with net zero emissions by 2050 and facilitate increased investment

in climate solutions.

C-FS4.5, C-FS4.5a

6. Provide asset owner clients with information and analytics on net zero investing and climate risk and opportunity.

C-FS2.2b, C-FS2.2c, C-

FS12.1b

Page 22 of 29 @cdp | www.cdp.net www.cdp.ne

7. Implement a stewardship and engagement strategy, with a clear escalation and voting policy, that is consistent with

our ambition for all assets under management to achieve net zero emissions by 2050 or sooner.

C-FS2.2e, C-FS3.6, C-FS3.6a,

C-FS3.6b, C-FS3.7, C-FS3.7a,

C-FS12.1c, C-FS12.2, C-

FS12.2a

8. Engage with actors key to the investment system including credit rating agencies, auditors, stock exchanges, proxy

advisers, investment consultants, and data and service providers to ensure that products and services available to

investors are consistent with the aim of achieving global net zero emissions by 2050 or sooner.

C12.1d

9. Ensure any relevant direct and indirect policy advocacy we undertake is supportive of achieving global net zero

emissions by 2050 or sooner.

C12.3, C12.3a

10. Publish TCFD disclosures, including a climate action plan, annually, and submit them to the Investor Agenda via its

partner organisations for review to ensure the approach applied is based on a robust methodology, consistent with the

UN Race to Zero criteria, and action is being taken in line with the commitments made here.

C3.1, C12.4

Table 3: Net-Zero Asset Owner Alliance (NZAOA) Commitment – Disclosure Indicators

Net-Zero Asset Owner Alliance (NZAOA) Commitment

2023 CDP Questions for

the Financial Services

sector

My organization commits to transitioning its investment portfolios to net-zero GHG emissions by 2050 consistent

with a maximum temperature rise of 1.5°C above pre-industrial levels, taking into account the best available scientific

knowledge including the findings of the IPCC, and regularly reporting on progress, including establishing intermediate

targets every five years in line with the Paris Agreement Article 4.9.

C 3.5, C 3.5a, C 4.1, C 4.1c,

C-FS 4.1d, C 4.2c,

C 4.3c, C-FS14.3

My organization fully endorses and understands in order to meet our fiduciary duty to manage risks and achieve

target returns, this Commitment must be embedded in a holistic approach to managing sustainability

considerations, incorporating but not limited to, climate change, and must emphasize GHG emissions reduction

outcomes in the real economy.

C 2.1, C-FS 2.2b, C 3.1,

C 3.3, C 3.4, C-FS 3.6,

C-FS 12.2

My organization will seek to reach this Commitment, especially through advocating for, and engaging on, corporate

and industry action, as well as public policies, for a low-carbon transition of economic sectors in line with science

and under consideration of associated social impacts.

C-FS 3.7a, C-FS 12.1c,

C 12.1d, C 12.1e, C12.3,

C 12.3b, C 12.3c, C 12.5,

C-FS 14.3a

Page 23 of 29 @cdp | www.cdp.net www.cdp.ne

Tracking and communicating on progress, by

• setting intermediate individual targets, in line with the Alliance’s Target-Setting Protocol, within 12 months of

joining

• publishing intermediate individual targets

• disclosing annually and publicly on progress towards intermediate individual targets, including on investment

portfolios’ emissions profile and emissions reductions

• reporting intermediate individual targets and annually on progress towards intermediate individual targets, via the

internal Alliance reporting template/tool for aggregation and publication in the Alliance progress report

• where the Alliance has or establishes a Position, considering1 to adopt and publish, where applicable, a

corresponding individual investment policy or approach, informed by the Alliance’s Position, as applicable within

twelve months of joining the Alliance, or within twelve months of publication of the Alliance Position

C-FS 3.6a, C-FS 3.6b,

C-FS 3.7, C 12.4,

C-FS 14.1

Table 4: Net-Zero Banking Alliance (NZBA) Commitment – Disclosure Indicators

Net-Zero Banking Alliance (NZBA) Commitment

2023 CDP Questions for

the Financial Services

sector

Transition all operational and attributable GHG emissions from our lending and investment portfolios to align with

pathways to net-zero by mid-century, or sooner, including CO2 emissions reaching net-zero at the latest by 2050,

consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100. This approach will take into

account the best available scientific knowledge, including the findings of the IPCC, so we commit to review and (if

necessary) revise our targets at least every five years after the target is set.

C 3.1, C 3.5, C-FS 4.1d,

C 4.2c

Use decarbonization scenarios which: are from credible and well-recognized sources; are no/low overshoot; rely

conservatively on negative emissions technologies; and to the extent possible, minimize misalignment with other

Sustainable Development Goals. We will provide a rationale for the scenario(s) chosen.

C 3.2, C 3.2a, C 3.2b

Prioritize our efforts where we have, or can have, the most significant impact, i.e. the most GHG-intensive and GHG-

emitting sectors within our portfolios, which are key to the transition to a net-zero carbon economy

C-FS 2.2b, C 3.3

Use the bank-led UNEP FI Guidelines for Climate Target Setting for Banks (“Guidelines”) to set scenario-

based intermediate targets for 2030, or sooner, for priority GHG-intensive and GHG-emitting sectors.

C 4.1c

Publish annually and share with UNEP FI for review, to monitor consistency with the UN Race to Zero

criteria and evidence that action is being taken in line with the commitments made here:

C 1.1b, C-FS 3.6,

C-FS 3.6a, C-FS 3.6b,

C 4.1, C 12.4,

Page 24 of 29 @cdp | www.cdp.net www.cdp.ne

• progress against absolute emissions and/or emissions intensity targets following relevant international and

national GHG emissions reporting protocols and/or climate portfolio alignment methodologies;

• progress against a board-level reviewed transition strategy setting out proposed actions and climate-related

sectoral policies; and

• disclosure for key sectors will be made within one year of setting of the target.

C-FS 14.1, C-FS 14.2b

We will meet this commitment through:

• facilitating the necessary transition in the real economy through prioritising client engagement, and offering

products and services to support clients’ transition;

• engaging on corporate and industry (financial and real economy) action, as well as public policies, to help

support a net-zero transition of economic sectors in line with science and giving consideration to associated

social impacts; and

• supporting innovation, the near-term deployment of existing viable technologies, and scaling up the financing of

credible, safe, and high-quality climate solutions that are compatible with other Sustainable Development Goals.

C-FS 2.2e, C 3.5a,

C-FS 3.8, C-FS 3.8a,

C 4.3c, C-FS 4.5,

C-FS 12.1b, C 12.1d,

C-FS 12.2, C 12.3,

C 12.5, C-FS 14.3a

In implementing and reaching targets for all Scopes of emissions, offsets can play a role to supplement decarbonisation

in line with climate science. The reliance on carbon offsetting for achieving end-state net zero should be restricted to

carbon removals to balance residual emissions where there are limited technologically or financially viable alternatives to

eliminate emissions. Offsets should always be additional and certified.

C11.2, C11.2a

Table 5: Net-Zero Insurance Alliance (NZIA) Commitment – Disclosure Indicators

Net-Zero Insurance Alliance (NZIA) Commitment

2023 CDP Questions for

the Financial Services

sector

Transitioning all operational and attributable greenhouse gas (GHG) emissions from its insurance and reinsurance

underwriting portfolios to net-zero emissions by 2050 consistent with a maximum temperature rise of 1.5°C above pre-

industrial levels by 2100 in order to contribute to the implementation of the COP21 Paris Agreement...

C 3.1, C 3.2, C-FS 14.3

Establishing, to the extent permissible by applicable laws and regulations, its intermediate, science-based targets

every five (5) years in line with Article 4.9 of the Paris Agreement...

C 4.1, C-FS 4.1d, C 4.2c, C-

FS 14.1

Supporting the implementation of corporate disclosure frameworks relevant to the net-zero transition and the

insurance industry...

C 12.5

Supporting the implementation of global policy frameworks relevant to the net-zero transition and the insurance

industry...

C 12.5

Page 25 of 29 @cdp | www.cdp.net www.cdp.ne

Signing the UN Principles for Sustainable Insurance prior to or upon joining the NZIA, or at the latest within one year

of joining the NZIA.

C 12.5

Seek to meet this Commitment through net-zero approaches relevant to insurance and reinsurance underwriting

portfolios, in such a manner that is at the discretion of my company and in accordance with applicable laws and

regulations...

C 2.1, C-FS 2.2b,

C-FS 2.2e, C 3.3, C 3.5, C

3.5a, C-FS 3.6

C-FS 3.6a, C-FS 3.6b,

C 4.3c, C-FS 4.5,

C-FS 12.1b, C 12.3,

Aim to transition its investment portfolio to net-zero GHG emissions by 2050 and consider joining relevant initiatives (e.g.

Net-Zero Asset Owner Alliance) in order to achieve, within my company, a consistent approach to net zero

C12.5, C-FS14.3

Work together with insurance associations, insurance and financial regulators and supervisors, governments, trade

bodies, policymakers, the UN and other intergovernmental organisations to promote the goals of the NZIA, and to seek

consistency of regulatory, supervisory and governmental policy frameworks with the net-zero transition.

C 12.3b

Engage with non-member insurance industry, financial sector peers and trade bodies; leading scientific methodological

and data-related organizations; academia; non-governmental organizations; and other key stakeholders on the goals of

the NZIA.

C 12.1d, C 12.3b

Table 6: Paris Aligned Asset Owners (PAAO) Commitment – Disclosure Indicators

Paris Aligned Asset Owners (PAAO) Commitment

2023 CDP Questions for

the Financial Services

sector

General Commitment: Our institution’s commitment recognises that investors across the globe have different

opportunities, constraints and starting points for achieving net zero emissions and there are a range of methodologies

and approaches available to investor to set targets and implement strategies. In some asset classes or for some

investments strategies, agreed net zero methodologies do not yet exist. We will, therefore, work to address these

challenges, including through the Paris Aligned Investment Initiative

C12.5

Page 26 of 29 @cdp | www.cdp.net www.cdp.ne

1. Transitioning our investments to achieve net zero portfolio GHG emissions by 2050

C3.1, C3.5

2. Implementing this commitment with the aim of achieving real economy emissions reductions and undertaking a

comprehensive set of actions available to investors, drawing on the Paris Aligned Investment Initiative’s Net Zero

Investment Framework.

C4.3c, C-FS14.3,

C-FS14.3a

3. Setting objectives and targets, including an interim target for 2030 or sooner for reducing Scope 1,2 and 3 emissions

associated with our portfolios and setting a target for increasing investment in climate solutions, consistent with a fair

share of the 50% global reduction in CO2 identified as a requirement in the Intergovernmental Panel on Climate change

special report on global warming of 1.5°C.

C4.1, C4.1a, C4.1b,

C-FS4.1d, C4.2c,

C-FS14.1, C-FS14.1a,

C-FS14.1b, C-FS14.1c

4. Where offsets are necessary where there are no technologically and/or financially viable alternatives to eliminate

emissions, investing in long-term carbon removals.

C11.2, C11.2a

5. Ensure any direct and collective policy advocacy we undertake supports policy and regulation relevant for achieving

global net zero emissions by 2050 or sooner.

C12.3, C12.3a, C12.3b

6. Implementing a stewardship and engagement strategy, with clear voting policy that is consistent with an objective for

all assets in the portfolio to achieve net zero emissions by 2050 or sooner.

C-FS2.2e, C-FS3.6,

C-FS3.6a, C-FS3.6b,

C-FS12.1c, C-FS12.2,

C-FS12.2a

7. Engaging with asset managers, credit rating agencies, auditors, stock exchanges, proxy advisers, investment

consultants, and data and service providers to ensure that funds, products and services available to investors are

consistent with achieving global net zero emissions by 2050 or sooner.

C-FS3.7, C-FS3.7a,

C-FS4.5, C-FS4.5a, C12.1d

8. Setting a target and reducing our operational (Scope 1 and 2) emissions in line with achieving global net zero

emissions by 2050, or sooner.

C4.1, C4.1a, C4.1b, C4.2c,

C5.2, C5.3, C6.1, C6.3

9. Disclosing objectives and targets, and publishing a clear Investor Climate Action Plan for achieving these goals as

soon as possible, no later than one year from making this commitment, and reviewing and updating targets every five

years or sooner.

C3.1, C4.1, C4.1a, C4.1b, C-

FS4.1d, C4.2c, C12.4

10. Reporting annually on the strategy and actions implemented and progress towards achieving objectives and targets,

and in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

C12.4, C-FS14.3

Page 27 of 29 @cdp | www.cdp.net www.cdp.ne

4. Appendix & references

Appendix A: UN HLEG Recommendation 4 Indicators

HLEG Recommendation 4: Creating a Transition Plan

CDP Indicator

Non-state actors must publicly disclose comprehensive and actionable net zero transition plans which indicate actions that

will be undertaken to meet all targets, as well as align governance and incentive structures, capital expenditures, research

and development, skills and human resource development, and public advocacy, while also supporting a just transition.

Transition plans should be updated every five years and progress should be reported annually.

UN4.1: Transition plan

disclosure

Disclose short-, medium- and long-term absolute emission reduction targets, and, if relevant, relative emission reduction

targets. Targets must account for all greenhouse gas emissions and include separate targets for materials non-CO2

greenhouse gas emissions.

UN4.2: Targets

Detail the third-party verification approach and audited accuracy.

UN4.3: Verification

Reference credible sector pathways consistent with limiting warming to 1.5°C with no or limited overshoot (e.g. IPCC,

Network for Greening the Financial System (NGFS), One Earth Climate Model (OECM)) and explain any materials

difference between the non-state actor’s transition plan and sector pathways

UN4.4: Sectoral pathways

Explain emissions reductions and, if needed, removal actions with time-bound key performance indicators. If removals are

needed, explain why.

UN4.5: Emissions reductions

and removals

Demonstrate how specific actions across all parts of the non-state actors’ value chain will meet near-, medium- and long-

term targets.

UN4.6: Value chain action

Disclose how capital expenditure plans, research and development plans and investments are aligned with all targets (e.g.

capex-alignment with a regional or national taxonomy) and split between new and legacy or stranded assets.

UN4.7: Aligned spending and

revenue

Outline actions to address any data limitations.

UN4.8: Addressing data

limitations

Detail value chain (e.g. suppliers) engagement approach.

UN4.9: Value chain engagement

Explain governance structure for transition and verification. Describe linking of near- and long-term targets with executive

compensation.

UN4.10: Governance

Page 28 of 29 @cdp | www.cdp.net www.cdp.ne

Outline the specific policies and regulations, including carbon pricing, needed to facilitate transition plans.

UN4.11: Assumptions and

expectations

Report on progress annually – especially in regards to targets, and explain plan changes on an annual basis.

UN4.12: Annual reporting

Transition plans should explain how the non-state actor is contributing to a Just Transition. The delivery of a net zero and

climate resilient economy in a way that delivers fairness and tackles inequality and injustice. These transition plans must

consider and address the broader social consequences and impacts of mitigation actions, including on race, gender and

intergenerational equity. Examples could include:

• a company, in partnership with its workers, unions, communities and suppliers has developed a Just Transition Plan;

• a company discloses how its plan integrates the United Nations Declaration on the Rights of Indigenous Peoples

(UNDRIP) and specifically the principle of free, prior and informed consent.

UN4.13: Just transition

Specify how to achieve and maintain operations and supply chains that avoid the conversion of remaining natural

ecosystems— eliminating deforestation, wetland and peatland loss by 2025 at the latest, and the conversion of other

remaining natural ecosystems by 2030.

UN4.14: Natural ecosystems

Disclose how lobbying and policy engagement policies and activities are consistent with the non-state actor’s net zero

targets.

UN4.15: Lobbying and policy

engagement

Demonstrate how all parts of the business (investment advisory, investment, facilitation, etc.) align with interim targets and

long-term net zero targets, including a strategy to identify and progressively phase out stranded assets.

UN4.16: Strategy and

implementation

For those asset classes or services for which emissions cannot (at least to date) be calculated, explain how net zero

commitments are addressed or considered.

UN4.17: Net zero across all

asset classes and services

Include engagement targets that include voting (especially proxy) strategies in line with decarbonisation and escalation

policies, policies on carbon credits and offsets, and the institution’s transition risk management strategy, including physical

risk.

UN4.18: Stewardship, offsets,

and risk management

Demonstrate alignment to funding and enabling real-world decarbonisation (e.g. green taxonomies), and contribute to help

financing net zero goals in developing markets via blended finance and other financial vehicles.

UN4.19: Solution financing

 
Page 29 of 29        @cdp | www.cdp.net www.cdp.ne        
t                                                                                                                      
5. Useful Resources  
 
More information about CDP’s questionnaires, associated reporting guidance, and technical notes detailing the alignment of CDP’s 
questionnaires to TCFD and transition plans: 
•
  Questionnaires and Reporting Guidance for disclosing companies (2023) 
•
  FAQs for companies, [including guidance for how to disclose to CDP even if you have not been requested to] (2023) 
•  Climate Transition Plan: Discussion Paper (2021) 
•  CDP Technical Note: Reporting on Transition Plans (2023) 
•  CDP Technical Note on the TCFD (2023) 
 
The net zero commitment statements and guidance documents referenced throughout this document: 
•  Net Zero Asset Managers Initiative, The Net Zero Asset Managers Commitment (2021) 
•  UN-convened Net-Zero Asset Owner Alliance, Commitment Document for Participating Asset Owners (April 2022) 
•  UN-convened Net-Zero Banking Alliance, Commitment Statement (April 2021) 
•  The Net-Zero Insurance Alliance, Statement of commitment by signatory companies (July 2021) 
•  The Paris Aligned Investment Initiative, Net Zero Asset Owner Commitment (March 2021) 
•  The Investor Agenda, Investor Climate Action Plans (ICAPs) Expectations Ladder (May 2021) 
•  Glasgow Financial Alliance for Net Zero, Financial Institution Net-zero Transition Plans (November 2022) 
•  United Nations’ High-level Expert Group on the Net Zero Emissions Commitments of Non-State Entities, Integrity Matters: Net Zero 
Commitments by Businesses, Financial Institutions, Cities and Regions (November 2022) 
 
 
 
 