The principles, which are voluntary guidelines for firms with commitments to net-zero carbon emissions, were announced by Treasury Secretary Janet Yellen on Tuesday during a speech in New York at the Bloomberg Transition Finance Action Forum. A net-zero commitment means reducing carbon emissions to zero, or removing as much carbon from the atmosphere as is added.The goal is to encourage the mobilization of more private-sector capital to mitigate the effects of climate change.
The treasury secretary said the principles would also help financial institutions that haven’t yet made net-zero commitments to see what doing so might entail. During a Monday call with reporters, a Treasury Department official stressed that the principles are voluntary and said that they were flexible given that a one-size-fits-all approach doesn’t work because of the differences, for instance, in size, between financial institutions.
“To be credible, this declaration should be accompanied or followed by the development and execution of a net-zero transition plan,” the report reads.