Group issues strict new ultimatum for banks and other institutions: 'No financial services should be provided'

The Science-Based Targets Initiative has launched its first set of guidelines for financial institutions to achieve net-zero, according to Climate Home News.

It calls on all groups to cut financial services to growing coal projects immediately and all oil and gas projects by 2030. Major companies, such as ING and UBS, contributed to the creation of the standard. Meanwhile, Shell withdrew from the consultation process after submitting a draft that called for the cessation of new oil and gas fields.

133 institutions have already pledged to the standard, and with good reason. Climate shifts stand to cost economies up to $24.7 trillion by 2060, according to one study.

The guidelines are especially welcome after the Net Zero Banking Alliance softened its standards considerably this spring. SBTi isn't without its own controversies, however. Its recent support of carbon credits has caused a wide range of disagreement.

Cutting off financing for fossil fuel companies is a key method of reducing atmospheric pollution and the destructive weather patterns that come with it. Emissions are exacerbating floods and droughts, which in turn ravage crop yields, raise grocery prices, and destroy homes, making property uninsurable.

Besides net-zero goals, fossil fuels are increasingly becoming a poor investment vehicle anyway. By comparison, momentum behind renewable energy investment is growing fast.

Finance industry professionals were happy to see the new SBTi guidelines from a respected player in the space.

According to Paul Schreiber, a senior policy analyst at Reclaim Finance, the guidelines are a "welcome, clear message that no financial services should be provided to companies developing coal, oil or gas," per Climate Home News.

Likewise, Connor Chung, analyst at the Institute for Energy Economics and Financial Analysis, said the standard "raises the bar on net-zero discourse for the financial sector," per Climate Home News.

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