Frameworks to Assess Transition

 

CBI's Transition programme aims to mobilise global capital for climate action by facilitating transition-labelled finance in high emitting sectors and associated enabling activities.

This programme gives guidance on what is a credible transition in order to:

  • guide investors to invest;
  • guide asset owners to upgrade; and,
  • guide policymakers to incentivise that transition. 

 

 

 

 

How to ensure the transition label has impact


The publication of a paper with Credit Suisse called "How to ensure the transition label has impact" presented a framework for identifying credible transitions aligned with the Paris Agreement.

It aimed to:

1. Define transition as a concept by presenting a starting point for the market to see a credible brown to green transition as ambitious, inclusive and aligned with the Paris Agreement (thereby avoiding greenwash).

2. Put forward a framework for use of the transition label in practice and propose clearly demarcated roles for both a green and a transition label.

It also outlined some principles that would be needed if such a transition was to be credible and not labelled as greenwashing:

        

Avoiding Greenwashing when financing company decarbonisation

Through 2021, further work was done on setting out what needed to be in place to avoid greenwashing and was published in a discussion paper.  'Transition Finance for Transforming Companies' presents a framework for identifying a company whose transition is rapid and robust enough to align with the global goal to nearly halve emissions by 2030 and reach net zero by 2050, in line with the Paris Agreement. It details 5 hallmarks that need to be in a transition plan in order for it to be credible. Learn more here.

 

 

Developing Sector-Specific Criteria

To support transition, CBI will be expanding it's certification scheme used for green bonds, to enable whole entities that are not currently green, but who need to change, to access finance.  Sector-specific criteria for these sectors are now being developed. Currently, we are developing criteria for Basic Chemicals, Cement, and Steel. You can find more information about these on the Standards webpages at this link: https://www.climatebonds.net/standard/available-soon

 

Basic Chemicals Cement Steel