SBTi publishes Net-Zero Standard for financial institutions

What happened

On 22 July 2025 SBTi published version 1.0 of its Financial Institutions Net-Zero Standard (FINZ). The standard covers banks, asset owners and managers, private equity firms and other financial institutions, and sets criteria for aligning lending, investment, insurance and capital markets activities with net zero by 2050 at the latest.

According to SBTi's announcement, the key elements are:

• Broader asset class coverage: The standard covers more asset classes.
• Inventory quality: The quality and transparency of financed emissions inventories must improve.
• Client alignment option: Instead of setting a reduction pathway for financed emissions, institutions can choose targets focused on their clients' net zero alignment.
• Fossil fuel policy: A transition policy is required, with clear steps and a timeline for ending new finance and insurance services to the fossil fuel sector.
• Deforestation: Deforestation risk in portfolios must be assessed, monitored and disclosed, with an engagement plan where the risk is significant.

The standard was developed through two public consultations, a pilot test with more than 30 financial institutions and input from an expert group. At publication, around 135 financial institutions from six continents had committed to set targets under it.

Who is affected

The direct impact falls on Turkish banks, insurers and portfolio management companies that have committed to SBTi or are considering it. The indirect impact falls on the real-economy companies that are their clients: a bank that chooses client alignment targets may start asking borrowers for SBTi targets, transition plans and verified emissions data. This trend should be read together with the update to financed emissions requirements in TSRS 2 by KGK, Türkiye's Public Oversight, Accounting and Auditing Standards Authority.

What companies should do

• Financial institutions: measure the data quality of financed emissions in your portfolio and decide which target approach is workable.
• Real-economy companies: find out your bank's climate policy and be ready for requests for emissions data and target information when loans are renewed.
• Companies in energy-intensive sectors: a transition plan and a verified inventory can be decisive for access to finance.

Alalëa supports financial institutions with portfolio targets and real-economy companies with the target and data package they present to banks: SBTi target setting.