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RMI, in cooperation with main international banks—BNP Paribas, Citi, Crédit Agricole CIB, Societe Generale, and Normal Chartered—and in session with business, specialists, and extra monetary establishments has developed a first-of-its-kind framework to allow banks to measure and disclose their aviation lending portfolios’ emissions in a constant and complete method.
At the moment, RMI introduced the launch of the Pegasus Pointers, the primary voluntary climate-aligned finance framework for the aviation sector, designed to assist banks independently measure and disclose the emissions depth and/or local weather alignment of their aviation lending portfolios in comparison with a 1.5°C state of affairs.
The aviation business contributes 2.5% of worldwide CO2 emissions and is the quickest rising transportation sector. The business’s success in transitioning to a low-carbon financial system will depend on a big ramp up of sustainable aviation fuels (SAF), in addition to additional improvement of hydrogen and battery-electric propulsion and fleet modernization. Monetary establishments can play an vital position in supporting a variety of options for the sector by means of financing the applied sciences, tasks, and corporations that may contribute to a low carbon future.
The aviation sector’s means to decarbonize relies on driving progress throughout a set of key know-how levers—a few of which they’ve the power to affect immediately, and a few of which would require collaboration throughout sectors and with policymakers. Underpinning the Pegasus Pointers is an understanding that monetary establishments and airways should work collectively to foster options that may assist the business decarbonize, along with policymakers, prospects, airports, gas producers, and NGOs. Collaboration with banks, buyers, and policymakers can be notably vital to speed up the manufacturing of SAF—essentially the most important lever of decarbonization for the sector.
The Pegasus Pointers had been designed by RMI and formed by a core working group of main monetary establishments and draw upon current requirements together with these of the Science-Based mostly Targets initiative (SBTi) and the Worldwide Civil Aviation Group’s Carbon Offsetting and Discount Scheme for Worldwide Aviation (ICAO CORSIA). Professional bono authorized recommendation was supplied by Watson Farley & Williams all through improvement. The framework is designed to be suitable with the Internet-Zero Banking Alliance’s pointers.
Along with the 5 banks who supported improvement of the Pointers, RMI is happy to share that an extra two monetary establishments will take up this technique—Caixa Financial institution and CIC—and two are testing implementation of the methodology and assessing future utilization of the Pointers—ING and Export Growth Financial institution of Canada.
Grace Cheung, Basic Supervisor of Sustainability at Cathay Pacific Airways stated, “We welcome the financing group’s efforts to standardize the evaluation of the local weather affect of their aviation portfolios. At Cathay, we consider collaboration is essential to a sustainable future and are dedicated to our ‘Greener Collectively’ imaginative and prescient. We hope the Pegasus Pointers can be broadly adopted.”
Much like frameworks accomplished for metal (Sustainable Metal Rules), delivery (Poseidon Rules), and aluminum (Sustainable Aluminum Finance Framework), the monetary establishments that leverage the Pegasus Pointers can be outfitted to:
Carry out a standardized evaluation to calculate their portfolio emissions depth and alignment with a 1.5°C state of affairs
Use a constant strategy to accessing high-quality and credible information
Disclose their aviation portfolio emissions depth and/or alignment outcomes yearly for transparency, whereas holding consumer info confidential
A launch occasion can be held by webinar on April 4, 2024. The Pegasus Pointers can be found free of charge and may be downloaded right here.
Tracey McDermott, Steering Group Chair of the Internet-Zero Banking Alliance and Group Head, Conduct, Monetary Crime and Compliance, Normal Chartered Financial institution stated, “The Internet Zero Banking Alliance welcomes the Aviation climate-alignment methodology developed by RMI in collaboration with main financiers. Members of the Alliance have dedicated to setting portfolio decarbonisation targets on this vital sector. This technique will help banks in understanding the online zero pathways for the sector and thus help banks as they search to measure and transparently disclose their local weather alignment and set targets on an impartial and particular person foundation. This can even assist to tell discussions between monetary establishments and their purchasers to help their transition to a web zero financial system. We sit up for persevering with our collaboration with RMI within the coming years as we navigate the transition to web zero.”
Jose Abramovici, International Head of Asset Finance Group of Crédit Agricole CIB stated, “After almost two years of labor, we’ve designed a framework for lenders to precisely assess and consider the emissions depth of their aviation mortgage e book. This isn’t a theoretical train—that is key to supporting the local weather alignment of the business.”
Yann Sonnallier, International Head of Aviation Finance at Societe Generale stated “Societe Generale is extraordinarily proud to be a founder and preliminary consumer of the Pegasus Pointers, and of all of the collective work achieved since 2022 to determine this reference methodology and framework, per NZBA necessities, and at the good thing about all aviation stakeholders.”
Bertrand Dehouck, Head of Transportation Capital Markets at BNP Paribas stated “Over the previous two years we’ve been targeted on constructing a sturdy methodology to measure the emissions depth of our aviation enterprise. By realizing what to measure, the best way to measure it and the place to supply the required information, we’re higher outfitted to know the core levers of decarbonisation and to help the sector’s low-carbon transition.”
Abhishek Pandey, International Head of Transportation Finance of Normal Chartered stated, “We’re delighted to have been a part of this vital initiative during the last two years, working alongside main banks and fascinating broadly throughout the business. The Pegasus Pointers provides NZBA signatories the instruments to navigate the pathways and set targets in direction of the decarbonization of the aviation business.”
© 2024 Rocky Mountain Institute. Printed with permission. Courtesy of RMI.
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