Setting Net Zero Targets

Image

"We urgently need every business, investor, city, state and region to walk the talk on their net zero promises." - Antonio Guterres, UN Secretary-General

The members of the NZFSPA Exchange have agreed upcon a Target Setting Framework, which serves as a common base for exchanges to set their own individual targets, tailored to their specific market circumstances. 

The Framework provides a comprehensive roadmap for capital market infrastructure operators to align their own operations with the goals of the Paris Agreement, and assist their markets to address the climate crisis. Developed in collaboration with over 56 industry experts from 28 different organisations, the Framework guides exchanges to set ambitious and credible net zero targets, enabling them to contribute meaningfully to a sustainable future. The approved framework can be found here.

The Framework emphasises the important role exchanges can play in leading by example, providing climate-related market education and promoting a just transition. It also captures the need for continuous reporting on progress.

With the approval of the framework, the Exchange Group become partner of the Race to Zero. Find out more about the relationship here.

“We warmly welcome the Net Zero Financial Service Providers Exchange Group as an official partner of the Race to Zero, highlighting the pivotal role of stock exchanges in catalysing the transition to a sustainable future. This partnership harnesses the collective power of financial service providers committed to achieving net zero emissions, exemplifying the collaborative spirit essential to tackling the climate crisis and inspiring others to join the global movement towards a just transition to a net-zero resilient world." - Dr Mahmoud Mohieldin and Her Excellency Ms Razan Al Mubarak, UN Climate Change High-Level Champions

About the NZFSPA

Jointly organised by

The Net Zero Financial Service Provider Alliance (NZFSPA) is a group of companies committed to playing a critical part in the global effort to move towards net zero. Service providers are an essential part of finance sector action on climate change. 

NZFSPA was established at the New York Climate Week in 2020 and has published its own 8-point net zero commitment, that all members need to sign: 

Download the full form here.

NZFSPA is made up of four groups with a vital and connected role to play.

Auditors build trust and confidence in information through the assurance services they provide on company-prepared financial information.

Exchanges run and maintain critical infrastructures and networks connecting investors, issuers and regulators. They act as influencers, educators and information gateways.

Index providers give real-time information about market performance. This is a key input for passive investment products and active investment fund strategies.

Research and data providers develop the research and data needed by all links in the investment chain. They also engage with and educate their clients, corporate issuers, and others.

You can find a full list of members here

The wider Net Zero Universe

The NZFSPA is a pivotal component of the global net-zero movement.

As financial institutions play a critical role in financing the transition to a low-carbon economy, organisations within the NZFSPA are organising their efforts with the Glasgow Financial Alliance on Net Zero (GFANZ). By leveraging their collective expertise, they aim to lead by example, set benchmarks for sustainable finance and encourage other exchanges to follow suit. GFANZ members are also working closely with the UN-backed Race to Zero initiative. 

About Net Zero

Put in simple terms, net zero means that the balance between the amount of greenhouse gases (GHGs) produced and removed from the atmosphere is zero; it looks at emissions overall. That means that while an absolute reduction in emissions is critical, the net zero concept allows for removing any unavoidable emissions. Removing GHGs could be via nature (e.g. trees take carbon dioxide from the atmosphere) or through new technology or changing industrial processes. 

GHGs are a key driver of global warming and ensuring that the world reaches net zero GHG emissions is essential for tackling climate change. Over the past decade, global emissions have risen steadily. To have any hope of keeping the long term global temperature rise to 1.5°C we need to have halved emissions by 2030 and reached net zero by 2050. Doing this requires us to reduce emissions by about 7% per year. Business as usual is not an option. 

The next decade is critical, which is why every country, sector and industry must work together to find ways to cut GHG emissions.