Tracking the Transition: Global Private Financial Institutions’ Progress Toward Net Zero
Financial institutions (FIs) play a crucial role in enabling the global transition to low-carbon and resilient economies. As owners and financiers, their decisions will determine whether the world moves toward sustainable pathways or remains locked into high-emission, vulnerable systems.
Scope of the Report
This analysis, based on CPI's NZFT data, examines the transition progress of 1,500 private financial institutions across 67 countries.
Investment Scale and Role of Financial Institutions
Meeting the investment scale required for the climate transition is within reach, but financial institutions must take a leading role. Their commitment will unlock both economic and environmental benefits.
Current Challenges
- Since late 2024, some major financial institutions have withdrawn from climate coalitions.
- The Net Zero Banking Alliance was disbanded, and the Net Zero Asset Managers Alliance was revised in 2025.
- Political backlash and regulatory uncertainty have caused institutions to rethink public climate commitments.
Even amid these challenges, many financial institutions acknowledge that decarbonization is vital for sustainable growth and to reduce climate, nature, and economic risks.
Outlook for Financial Institutions
As global decarbonization pathways advance, financial institutions that accelerate progress and maintain commitment will benefit the most from the climate transition. Banks and asset managers must adapt to evolving market preferences and regulations focused on sustainability, as the value of carbon-intensive assets declines.
Author's summary: Financial institutions face challenges but remain key players in driving the low-carbon transition, with those maintaining momentum positioned to succeed in a shifting economic landscape.