Financial institutions play a critical role in determining the pace and scale of global decarbonization. By increasing investment in renewable energy and emissions reducing technologies while limiting financial support for high-emitting projects and companies, banks can significantly influence progress toward global climate goals. At the same time, the sector faces growing climate-related risks, including physical climate impacts, mortgage defaults, and broader financial instability. 

To understand and manage these risks, banks are increasingly measuring financed and facilitated emissions -- the emissions linked to investments, lending activities, and financial services. Transparent disclosure of these values is essential for evaluating exposure to climate risk, setting effective targets, and guiding sustainable finance strategies. Our work supports financial institutions in disclosing these metrics, adopting science-aligned goals, and assisting corporate clients as they transition to low-carbon business models. 

Areas of Focus 

• Financed and facilitated emissions disclosures and targets: Financed and facilitated emissions disclosures allow banks to understand how their activities contribute to global emissions and where opportunities for decarbonization exist. Annual assessment of these values informs strategic investment decisions and helps institutions reduce long term systemic risk. In recent years, most major U.S. banks have begun reporting these metrics and setting emissions reduction targets, reflecting growing recognition of the importance of transparent climate accounting. 

• Client engagement and transition plan evaluation: Once emissions targets are established, banks can evaluate the transition plans of clients in high-emitting sectors to identify where additional support or restructuring is needed. Reviewing client strategies helps financial institutions determine whether companies are aligned with net zero pathways and where targeted engagement can accelerate emissions reduction. These assessments also strengthen risk management by highlighting clients whose practices could undermine long-term financial stability.