The Science Based Targets initiative (SBTi) has announced that financial institutions can continue setting climate targets using the Financial Institutions Near-Term Criteria without an end date, reversing previous plans to review the pathway in 2027.
The decision ensures both the Financial Institutions Net-Zero Standard and the Near-Term Criteria remain accessible indefinitely, providing asset managers, banks, and insurers with regulatory certainty over their target lifecycles.
The framework update mirrors the structure of the SBTi Corporate Net-Zero Standard Version 2.0, allowing financial institutions to establish standalone near-term targets that remain valid throughout their cycle.
To date, more than 180 financial institutions globally have secured validated science-based targets. Asian institutions represent a significant portion of this total, with banks accounting for one-third and private equity firms representing a quarter.
Key updates to the regulatory framework and technical support resources include:
- Target review timelines: Updated Mandatory Five-Year Review Guidance explicitly defines review schedules for mature cohorts reaching the end of their target cycles, clarifying that updates are not required if existing targets meet current criteria.
- Educational modules: Release of four specialized learning modules on the SBTi Academy platform covering target-setting methodologies and practical sector implementation.
- Insurance sector guidance: Published webinar recordings and updated FAQs addressing the application of the Net-Zero Standard to insurance underwriting portfolios.
- Technical tool adjustments: Updated the Net-Zero Target-Setting Tool to temporarily pause power sector technology share targets and automotive emissions intensity calculations pending finalized SBTi Sector Standards.
According to survey data cited by the SBTi, 80 per cent of companies with validated targets reported improved investor relations, while 44 per cent noted enhanced access to capital.
