BackPublication of the Net-Zero Donut annual report on the 'net-zero' commitments of European banks
The Observatory has updated its Net-Zero Donut methodology and analysed the net-zero commitments of 19 major European banks.
Publication of the report
This report is based on the Net-Zero Donut analytical framework and provides an overview of the practices of 19 major French and European banks that have signed up to the NZBA: Banco Santander, Barclays, BBVA, BNP Paribas, Crédit Agricole, Crédit Mutuel, Crédit Mutuel Arkea, Deutsche Bank, Groupe BPCE, HSBC Group, ING, Intesa Sanpaolo, La Banque Postale, Lloyds Banking Group, NatWest, Société Générale, Standard Chartered, UBS and UniCredit. These banks, committed to achieving carbon neutrality by 2050, are defining intermediate decarbonisation targets for the nearer future (2025, 2030) based on the methodology proposed by the NZBA.
Following on from this analysis, the Observatory makes 21 recommendations on the transparency of extra-financial reports, the content of transition plans, sectoral policies, indicators for steering the transition beyond the carbon metric and commitment strategies.
Update of the Net-Zero Donut methodological framework
In view of the observation of a certain inconsistency between the strong objective of the initial commitment made by the signatories of the alliances to become ‘Net-Zero’, and the practices observed as a result, the Observatory deemed it relevant to participate in the creation of a coherent and sourced analysis framework enabling the alliances to complete their guidelines as precisely as possible and the players to have precise methodological proposals to apply in order to enable them to fulfil their Net-Zero commitments and achieve, together, this common objective.
In 2023, the Observatory created a tool that makes it easy to track the progress of each Net-Zero player and alliance: the Net-Zero Donut.
The Net-Zero Donut® is a framework for analysing the climate transition targets and plans of financial institutions, designed to help them set appropriate targets and monitor them appropriately, and to help alliances define ambitious guidelines for their signatories. Its interactive display on the Observatory website also makes it easy to monitor each player and their alliance.
In 2024, the methodology was reviewed and completed, with the contribution and validation of the Scientific and Expert Committee of the Paris Agreement Research Commons (PARC). It now includes 222 indicators to monitor and evaluate the intermediate targets set, the definitions adopted for green activities, internal climate risk management processes, climate skills management, sectoral policies, particularly on fossil fuels, and other aspects of the transition plans. Of these indicators, 96% have an assessment framework based on external sources such as ADEME's ACT Finance, TCFD and HLEG recommendations, the PCAF methodology, SBTi and CA100+ standards, ISO and IFRS standards, EFRAG's ESRS, Urgewald's GCEL, and all GFANZ recommendations, in particular the NZTP.
A methodological document detailing the design of the Net-Zero Donut, its sources and each of the 222 indicators is available below: