CDP Technical Note: Financial Services Transition
Plans and Net Zero Commitments
CDP Climate change QuestionnaireExecutive Summary
In this technical note, we expand on CDP's existing research into credible climate transition
plans, by mapping additional disclosure indicators specifically for the financial sector. Our aim
is not to create new frameworks but to complement existing guidance and reporting
requirements by aligning them with transition plan guidelines and frameworks produced forand by the sector. Additionally, we provide guidance on how financial institutions signatories
to the Glasgow Financial Alliance for Net Zero (GFANZ) sector-specific alliances can disclosein line with their net zero commitments.
The financial sector plays a critical role in facilitating the transition to a net zero economy
through its financing of real economy activities. To enable transparent and comparable
baselines for action, financial institutions must disclose how they are embedding
environmental considerations across their businesses. As the regulatory landscape rapidly
also evolves, mandatory climate-related disclosures are being widely implemented, including
information on transition plans.
CDP offers a TCFD-aligned climate change questionnaire specifically designed for financial
institutions. This questionnaire incorporates science-aligned requirements, market needs, andtrends in corporate climate change reporting. It has evolved over time to accommodate various
frameworks such as the Investor Climate Action Plans (ICAPs) framework and net zerocommitments under the sector-specific alliances of GFANZ.
Many financial institutions have committed to achieving net zero emissions through the
GFANZ sector-specific alliances. These alliances require climate-related disclosures that
demonstrate progress towards net zero. Transition plans have gained prominence as a means
to translate commitments into accountable action. Since 2022, several guidelines andframeworks for transition plans have been released for the financial sector by organizations
such as GFANZ, the Investor Agenda, and the United Nations High-Level Expert Group on
Net Zero Emissions Commitments of Non-State Entities. These have been mapped to theclimate change questionnaire for financial institutions and to the disclosure indicators of acredible climate transition plan for the sector.
CDP remains committed to staying up to date with scientific requirements and participating in
the development of upcoming standards and regulatory requirements. The first iteration of thisFinancial Services technical note serves as the initial guide for financial institutions to connect
their disclosures to the evolving landscape of net zero commitments and transition plans.
Going forward, CDP plans to publish a detailed technical note that outlines the alignment
between its questionnaires and the UK Transition Plan Taskforce's disclosure framework.

Page 2 of 29@cdp | www.cdp.net www.cdp.netContents
CDP Technical Note: Financial Services Transition Plans and Net Zero
Commitments ........................................................................................................... 1
Version ................................................................................................................... 4
1. Introduction .......................................................................................................... 5
1.1 About this technical note ................................................................................... 5
1.2 CDP’s Climate change questionnaire and evolving disclosure by financial
institutions ............................................................................................................... 5
1.3 Credible climate transition plans for financial institutions .................................. 8
1.4 Principles for a credible climate transition plan ................................................. 9
2. Financial sector guidance, recommendations, and requirements on net zerocommitments and climate transition plans .......................................................... 11
2.1 Financial services sector-specific net zero alliances ....................................... 11
2.2 Investor Climate Action Plans ......................................................................... 11
2.3 GFANZ Financial Institutions Net Zero Transition Plan Recommendations .... 12
2.4 United Nations High-Level Expert Group Recommendations on Transition
Plans ..................................................................................................................... 12
3. Reporting against financial sector net zero commitments and action plans 13
3.1 Reporting on climate transition plans for financial institutions ......................... 13
Table 1: Climate Transition Plans for Financial Institutions ................................... 14
3.2 Reporting Against Net Zero Commitments...................................................... 20
Table 2: Net Zero Asset Managers Initiative (NZAM) Commitment – Disclosure
Indicators .............................................................................................................. 21
Table 3: Net-Zero Asset Owner Alliance (NZAOA) Commitment – Disclosure
Indicators .............................................................................................................. 22
Table 4: Net-Zero Banking Alliance (NZBA) Commitment – Disclosure Indicators 23
Table 5: Net-Zero Insurance Alliance (NZIA) Commitment – Disclosure Indicators.............................................................................................................................. 24
Table 6: Paris Aligned Asset Owners (PAAO) Commitment – Disclosure Indicators.............................................................................................................................. 25
4. Appendix & references ...................................................................................... 27
5. Useful Resources ............................................................................................... 29

Page 3 of 29@cdp | www.cdp.net www.cdp.netVersion
Version number

Release / Revision dateth

1.0

Released: May 26 , 2023

2.0

Revised: July 2023

Revision summary
Publication of the Financial Services
Transition Plans and Net Zero
Commitments Technical Note
Revision made to Table 2: Net Zero AssetManagers initiative (NZAM) Commitment– Disclosure Indicators

Copyright © CDP Worldwide 2023
The copyright in this document is owned by CDP Worldwide, a registered charity number
1122330 and a company limited by guarantee, registered in England number
05013650.
Any use of any part of this document must be licensed by CDP. Any unauthorized use isprohibited, and CDP reserves the right to protect its copyright by all legal means
necessary.

Page 4 of 29@cdp | www.cdp.net www.cdp.net1. Introduction
1.1 About this technical noteThis technical note supports financial institutions disclosing to CDP through its climate change
questionnaire. It indicates how financial institutions can disclose in line with establishingcredible climate transition plans and net zero commitments, and how these suggestions map
to sectoral guidelines, as well as recommendations made by the United Nations High-Level
Expert Group on the Net Zero Emissions Commitments of Non-State Entities.
Section 1 provides an overview of CDP’s climate change questionnaire for financial services
companies and expands on CDP’s general reporting guidance to describe elements of acredible climate transition plan for financial institutions, and associated disclosure indicators.
Section 2 provides context about:
Commitments set by financial sector-specific net zero alliances; Net Zero Asset Managers Initiative (NZAM)
 Net-Zero Asset Owner Alliance (NZAOA) Net-Zero Banking Alliance (NZBA) Net-Zero Insurance Alliance (NZIA) Paris Aligned Asset Owners (PAAO) [formerly known as the Paris Aligned Investment
Initiative, or PAII]
Disclosure guidelines relating to: The Investor Agenda’s Investor Climate Action Plans (ICAPs) Expectations Ladder; The Glasgow Financial Alliance for Net Zero (GFANZ)’s financial institutions net zerotransition plan recommendations; Transition plan recommendations from the United Nations High-Level Expert Group on
the Net Zero Emissions Commitments of Non-State Entities.
In section 3, Table 1 provides a mapping of CDP’s elements of a credible climate transition
plan for financial institutions to guidelines by the GFANZ, UN HLEG, and Investor Agenda(ICAPs). Tables 2-6 provide a mapping of net zero commitment statements by financial sectorspecific net zero alliances to the CDP climate change questionnaire.
Section 4 provides further resources to supplement the information detailed in this technicalnote.

1.2 CDP’s Climate change questionnaire and evolving
disclosure by financial institutions
The structure of the CDP climate change questionnaire is designed to incorporate climate
science-aligned requirements alongside market needs and trends in corporate climate changereporting, including the integration of sector-specific questions for the financial services (FS)Page 5 of 29@cdp | www.cdp.net www.cdp.netsector1. Organizations in the FS sector should respond to the CDP questionnaire2 in thecontext of their financing activities, in addition to their operational activities where appropriate.
They are presented with sector-specific climate change questions and modifications toexisting climate change questions, and provided with specific reporting guidance clarifying thetype of information that banks, investors (asset managers / asset owners) and insurancecompanies should consider in their response.
CDP’s financial services questions focus on the following topics:
 Governance of climate strategy, transition plans, and their implementation
 Portfolio exposure to environmental risks and opportunities;
 Environmental issues in the organization’s policy framework;
 Engagement with clients and investee companies; Financed emissions, in line with the Partnership for Carbon Accounting Financials
Global GHG Accounting and Reporting Standard for the Financial Industry, andadditional portfolio impact metrics;
 Portfolio alignment to 1.5-degree world; and,
 Shareholder voting on environmental issues.
CDP recognizes the important role of the Taskforce on Climate-Related Financial Disclosures(TCFD) in mainstreaming climate-related information and advancing the availability offinancially relevant information for global markets. Its recommendations ensure climaterelated information is integrated into mainstream financial reports, providing transparency anda roadmap for meeting the temperature commitments of the Paris Agreement. CDP committed
to align its questionnaires with the TCFD’s recommendations, alongside the sectoral focus
and adopting a forward-looking approach to climate-risk disclosure. This harmonization
continues to help to drive the adoption of TCFD recommendations by reporting companies,
optimizing the reporting burden, and speeding-up the generation of decision-useful
information for data users.
The TCFD recommendations highlight the important role of the financial sector as preparersof environmental disclosures. Disclosure by this sector enables investors, central banks,
regulators/supervisors, and other relevant stakeholders to better understand theconcentrations of carbon-related assets in the financial sector and the financial system’s
exposures to environmental risks through activities such as lending, financial intermediary,investment and/or insurance underwriting.
A fast-evolving regulatory landscape has accelerated the need for standardized climaterelated disclosures, including information related to the net zero transition. Building on the
momentum from COP26 (which outlined the influence of non-state actors on accelerating
action for a transition towards a 1.5°C world), COP27 led to significant announcements
indicating the need for organizations to disclose their plans and progress towards net zero, in
preparation for regulatory change. This included recommendations by the UN High-Level
Expert Group on Net Zero Emissions Commitments of Non-State Entities, which are set toharmonize claims by campaigns and initiatives and underpin a wave of net zero oriented
regulations around the world. For the financial sector in particular, this evolution will continue
as emerging standards and jurisdictional regulations position disclosure of portfolio-related
Scope 3 emissions as particularly significant. Key examples include:

1

Activities in the financial services sector that are covered include banking, investing (asset
management and/or asset ownership) and insurance underwriting.
2 All question numbers in the general climate change questionnaire begin with the letter C. Introduced
in 2022, question numbers in the new forests and water module for financial services organizations
only, begin with the letters FW. Questions that are unique to companies in the financial sector arelabelled using “FS” within the question number.
Page 6 of 29@cdp | www.cdp.net www.cdp.net The UK Transition Plan Taskforce’s draft Disclosure Framework and accompanying

Implementation Guidance provides recommendations for financial institutions todevelop gold-standard transition plans. Under current UK reporting rules, many asset
owners and asset managers are required by UK regulators and the government tomake TCFD-aligned disclosures – which has continually evolved as the TCFD has
updated its guidance to reflect thought leadership on net zero transition frameworks.
These requirements have been extended to the setting of transition plans.
 The International Financial Reporting Standards (IFRS), through the International
Sustainability Standards Board (ISSB), released exposure drafts for its Sustainable
Disclosure Standards, and the European Financial Reporting Advisory Group(EFRAG) approved the first set of European Sustainability Reporting Standards(ESRS), including its proposed disclosure recommendations on transition plans andscope 3 disclosures, including financial investments. The EU’s Corporate
Sustainability Reporting Directive, together with the EU Sustainability ReportingStandards developed by EFRAG, will require large companies (more than 500
employees) to disclose on their transition plans for climate change mitigation and theirplans to ensure that their business model and strategy are compatible with the respectof planetary boundaries of the biosphere integrity and land-system change.
Companies previously covered by the NFRD (Non-Financial Reporting Directive) will
have to start disclosing in 2025 on FY 2024, whilst other large & listed companies will
be required to disclose transition plans the following year.
 The US Securities and Exchange Commission’s proposed rule largely tracks the
Task Force on Climate-Related Financial Disclosures (TCFD), including reference totransition plans. In its proposed rule, the SEC recognizes CDP’s important role in
implementing the TCFD recommendations: “the CDP questionnaire fully incorporates
the TCFD framework and thus exhibits full alignment.”3
Transition plans are also a topic of interest for prudential supervisors looking to assess,monitor and address bank’s alignment with the net zero transition. The strategic importanceof transition plans to prudential supervisors has been acknowledged by prominent central
bankers, as a mechanism for banks to step up their risk management capabilities. This is anarea of potential growth for increasingly stringent supervisory expectations and regulations in
the future.
With many emerging mandatory regulations and standards modelled on the TCFD
recommendations and the GHG Protocol, companies disclosing through CDP are well
prepared for compliance. CDP will incorporate the ISSB’s IFRS S2 Climate-related DisclosureStandard into its global environmental disclosure platform, rapidly scaling the global adoptionof the standard in advance of it becoming regulation.
Disclosure through CDP’s Climate change questionnaire for the Financial Sector allows
financial institutions to meet the gold standard in environmental reporting, including: Enhancing transparency that in turn demonstrates a commitment to sustainability,and gain recognition for a commitment to climate and environmental action;
 Getting ahead of regulation by fulfilling the recommendations of the TCFD
(actionable metrics, risks and opportunities); Improving business risk awareness and long-term resilience, identifying financial
savings, and enhancing reputation and shareholder confidence; Spurring ambition concerning portfolio impacts and preparedness for the transition
towards a 1.5-degree, nature positive future; Enabling data to be shared with multiple stakeholders through one submission.
3 See The Enhancement and Standardization of Climate-Related Disclosures by Securities andExchange Commission, page 314.
Page 7 of 29@cdp | www.cdp.net www.cdp.netCompanies disclosing robustly to CDP have been shown to increase their environmental
ambition over time by leveraging CDP’s framework to identify best practice and determine
next steps in their environmental journey. As CDP’s questionnaire has been mapped against
various net zero and transition plan frameworks for financial institutions, disclosing enables
an organization to demonstrate alignment with the recommendations from leading industry
alliances, initiatives, and frameworks, and CDP recommends comprehensive disclosure
across all elements of the questionnaire to display leadership in environmental reporting.
Note that the mapping below references only the Climate change questions in the CDP climatechange questionnaire for the financial sector. In 2022, CDP added a module to the end of the
Climate change questionnaire for organizations in the financial sector to disclose informationon the topics of forests and water security, as well as several high-level questions on
biodiversity for all corporates. These topics are beyond the scope of this document – future
iterations will be updated to reflect the evolving consensus on nature-related disclosures forfinancial institutions.
With deforestation and water security both posing substantial financial risks to companies andtheir financiers and given that there are no routes to a 1.5°C future without tackling climate
and nature together, disclosing financial institutions are strongly encouraged to complete theforests and water-related questions where applicable. Those that are taking steps to assess
and mitigate these relevant and material risks will be well placed to prosper as the global
economy shifts to account for nature-related impacts and dependencies.
The TNFD framework and emerging guidance for nature-related financial disclosures(forthcoming in 2023) support the implementation of target 15 of the Global Biodiversity
Framework agreed at the 2022 UN Biodiversity Conference. CDP annually reviews its
questionnaires in line with the latest environmental science and is well-positioned to accelerate
the implementation of target 15, and to track progress.

1.3 Credible climate transition plans for financial institutions
CDP’s discussion paper and technical note, which are the outcome of an extensive technicalreview of leading guidance in this space, outline the key elements of a sector-neutral credible
climate transition plan and the associated disclosure elements via CDP’s climate change
questionnaire. CDP has since identified additional sector-specific indicators for financial
institutions and mapped each of them to this existing framework.
Across 2022 and 2023, various transition plan guidelines and frameworks have been released.
This technical note does not intend to create a new framework – instead, we have identified
sector-specific indicators for financial institutions and mapped each of them to CDP’s existingguidance for disclosing credible climate transition plans, per Section 3.1 and Table 1.
Financial institutions that are Capital Markets signatories to CDP can find out more about
disclosure data pertaining to the transition plans of real economy companies through theiraccount managers. Transition plan indicators are also included as part of the CDP
Temperature Ratings dataset.
Following the definition and principles of a credible climate transition plan from our technicalnote:
A credible climate transition plan is a time-bound action plan that outlines how anorganization will achieve its strategy to pivot its existing assets, operations, and entire
business model towards a trajectory aligned with the latest and most ambitious climate

Page 8 of 29@cdp | www.cdp.net www.cdp.netscience4 recommendations. i.e., halving greenhouse gas (GHG) emissions by 2030 andreaching net-zero by 2050 at the latest, thereby limiting global warming to 1.5°C.
Based on CDP data and research into established frameworks, CDP considers a credible
climate transition plan to be defined by the five following characteristics:
 It supports a strategy for the climate transition, i.e., actions that need to occur for an
organization to pivot towards a 1.5°C world, with near-term (five to ten-year) sciencebased targets (emissions reduction targets in line with 1.5°C pathways), and then longterm science-based targets (SBTs) (for 2050 at the latest)
 It contains verifiable and quantifiable key performance indicators (KPIs) which:o measure the success of an organization’s climate transition; ando are tracked regularly.
 It is succinctly integrated into an organization’s existing mainstream filings (in annual
financial reporting/sustainability reporting/overall business strategy)5, and provides anaccountability mechanism
 It is guided by the principles outlined in section 1.4
 It contains the key elements outlined in Table 1, which are the outcome of an extensive
technical review.
These criteria demonstrate that an organization is aligning with ambitious long-term climate
goals, and that its business model will transition, in order to be relevant (i.e., profitable) in a
1.5°C world. To avoid potential regulatory shocks, organizations should aim to align, as aminimum, with relevant Paris-aligned policy goals for where the organization operates (thisincludes direct and value chain operations). Given the number of countries that havecommitted to net-zero emissions, it is critical that stakeholders are able to assess anorganization’s plans to align with such a future (refer to NetZero tracker).

1.4 Principles for a credible climate transition plan
CDP has developed six fundamental principles that will guide the preparation of a credible
climate transition plan:
1. Accountability: The plan has clearly defined roles and responsibilities. This includes
effective governance mechanisms, where the board and C-suite executives areaccountable for implementation of the plan.
2. Internally coherent: The plan is integrated into the business strategy and financial
planning of the organization.
3. Forward looking: The plan should reflect considerations of the short- and long-term,
trending towards 2050. However, an emphasis on the short-term (the next 5-year
timeframe) is critical to achieve long-term climate ambitions, which should be
supported by governance mechanisms (new or existing).
4. Time bound and quantitative: The plan’s KPIs are quantifiable and are outlined for
defined timeframes.

4 As communicated by the Intergovernmental Panel on Climate Change (IPCC) and the Science

Based Targets initiative (SBTi).
5 The exact reporting system utilized may vary by organization. For better accountability, (1) ease of
integration and (2) reporting frequency should be the key factors used to assess where to integrate thetransition plan.
Page 9 of 29@cdp | www.cdp.net www.cdp.net5. Flexible and responsive: The plan is reviewed and updated regularly6, with a defined
stakeholder feedback mechanism in place (e.g., shareholders, at AGMs).
6. Complete: The plan covers the whole organization and its value chain, i.e., any
exclusions from the plan must not be material to the organization and/or its impact on
the natural environment (ensuring the double materiality principle applies to disclosureof exclusions).

6 In alignment with the 2021 update to the TCFD’s recommendations, with its integration of transition

plans, transition plans should at a minimum be reviewed every five years for continuous relevancy andefficacy and updated if required. The TCFD also notes that progress against the plans should bereported annually, alongside any material, substantive changes to the plan be reported annually (ifrequired).
Page 10 of 29@cdp | www.cdp.net www.cdp.net2. Financial sector guidance, recommendations, andrequirements on net zero commitments and climatetransition plans
This section outlines the context about initiatives and their requirements and/or guidance,
which have been mapped to CDP’s climate change questionnaire and to the disclosure
elements associated with a credible climate transition plan for financial institutions.

2.1 Financial services sector-specific net zero alliances
As of January 2023, over 550 firms are members of sector-specific net zero alliances acrossthe global financial sector. These independent alliances were brought together as part of the
Glasgow Financial Alliance for Net Zero (GFANZ), and each have established membershipcriteria which includes the commitment to net zero by 2050, in addition to setting interim
targets for 2030 or earlier and reporting transparently on progress along the way.
CDP has mapped the commitments of five of these alliances to CDP’s 2023 climate change
questionnaire:7:






Net Zero Asset Managers Initiative (NZAM)
Net-Zero Asset Owner Alliance (NZAOA)Net-Zero Banking Alliance (NZBA)Net-Zero Insurance Alliance (NZIA)
Paris Aligned Asset Owners (PAAO) [formerly known as the Paris Aligned Investment
Initiative, or PAII]

2.2 Investor Climate Action Plans
The Investor Agenda is a coalition of seven major NGO groups working with investors,
collaborating to develop investor guidance to tackle the climate crisis. They have developed
the Investor Climate Action Plans (ICAPs) Expectations Ladder and Guidance, to provide
institutional investors with clear expectations for issuing and implementing climate action plansin line with net zero by 2050.
The Investor Agenda outlines that the Ladder and Guidance can be used by investors to: (1)assess their current approach to managing climate change risk and opportunity; (2) publish astandalone ICAP; (3) embed elements of the ICAPs into their climate change strategies anddisclosures; (4) communicate their current activities and plans to stakeholders.”
Financial institutions can disclose their ICAPs through CDP’s Climate change questionnaire
in line with ICAPs Expectations Ladder and Guidance.

7 The following publicly available documents that outline the commitments of each alliance have beenused for this mapping: NZAM, NZAOA, NZBA, NZIA, PAAO. These alliances have, in some cases,
provided more detailed implementation guidance for net zero and portfolio target setting, which is not
the subject of this document.

Page 11 of 29@cdp | www.cdp.net www.cdp.net2.3 GFANZ Financial Institutions Net Zero Transition Plan
Recommendations
In November 2022, GFANZ published voluntary recommendations and guidance to support
financial institutions with the development and execution of net zero transition plans. This
includes a framework for financial institutions’ transition plans. accompanied by suggestionsof possible disclosure content for transition plans, which they note are not detailed
recommendations.
By analysing GFANZ disclosure suggestions outlined by GFANZ, the mapping in Table 1
indicates which sub-component of the GFANZ framework aligns to CDP’s elements of acredible climate transition plan for financial institutions.

2.4 United Nations High-Level Expert Group Recommendations
on Transition Plans
The UN-established High-Level Expert Group on the credibility and accountability of net zero
emissions commitments of non-state entities released a landmark report in November 2022.
The report offers ten recommendations for what non-state actors, including financial services
institutions, must do through each stage of their progress towards net zero. Notably, thisincludes publishing transition plans. The mapping in Table 1 outlines how CDP’s Climatechange questionnaire maps to the “Detailed Recommendations” noted in the section of thereport titled Recommendation 4: Creating a Transition Plan.

Page 12 of 29@cdp | www.cdp.net www.cdp.net3. Reporting against financial sector net zerocommitments and action plans
The following section outlines how the CDP Climate change questions for financial services
companies map to specific net zero commitment and climate transition plans8.

3.1 Reporting on climate transition plans for financial
institutions
CDP’s climate change questionnaire collects data on climate transition plan elements. Building
on sections 1.3 and 1.4, Table 1 below maps the 2023 CDP climate change questions forfinancial institutions to the key elements of a credible climate transition plan for financial
institutions, and to the guidance from GFANZ, the Investor Agenda ICAPs, and the UN HLEG.
Financial institutions can disclose through CDP’s climate change questionnaire against thefollowing indicators, to demonstrate that their efforts to transition to a 1.5°C world are in linewith having a credible climate transition plan.
Additionally, using the mapping below, organisations can see at a high-level, how each ofthese disclosure elements map to the guidance noted above, to disclose in alignment with thedetails suggested by these organisations.9 CDP disclosure captures the GFANZ and ICAPs
recommendations, thereby providing the platform for comprehensive disclosure.
Please note that we have abbreviated the UN HLEG Recommendation for creating a transition
plan to a set of reference indicators (UN4.1 – UN4.19). The full recommendation text alongwith the indicators referenced in Table 1 are available via Appendix A.

8This mapping has been conducted by CDP, to support financial services companies to disclose
comprehensively whilst simultaneously seeing how the questionnaire maps to various net zero andtransition plan related requirements and guidelines. Within these, some requirements are high-level anddo not have publicly available guidance for how to report against them. This mapping is therefore
intended to be used only as a reference point by financial institutions to support them in meeting various
external requirements and displaying environmental leadership by disclosing to CDP.
9 This table also includes the mapping to the ICAPs Expectations Ladder, which is primarily aimed at
asset managers and asset owners. Note that the broader guidance in Table 6 applies to a broader
range of financial institutions – including, but not limited to, banks and insurers.

Page 13 of 29@cdp | www.cdp.net www.cdp.netTable 1: Climate Transition Plans for Financial Institutions
CDP Climate
Transition Plan
Element

Aligned 2023
CDP
Question
Number for
Financial
Services
C1.1, C1.1a,
C1.1b (Boardlevel
oversight)

C1.1d (Board
expertise on
climate related
issues)Governance
C1.2(Executive
management
accountability& feedback
mechanisms)
C1.3, C1.3a(Executive
incentives
linked toclimateperformanceindicators)

Relevance

To ensure accountability for developing an
ambitious plan as well as implementationof the plan’s ambitions, board level
oversight of the climate transition plan is
crucial in steering business strategy
towards a 1.5°C aligned trajectory.
Addressing climate change requires
specific expertise related to climate change
and its impacts, and the potential direct
and indirect effects on the business.
Ensuring this capability exists withingovernance structures indicates anorganization’s competence in delivering on
its climate transition plan and increases the
chance of success.
Executive management have responsibilityfor (1) developing a climate transition plan,and (2) frequently reporting to the board on
progress towards realizing the plan’s
ambitions.
To incentivize conscious action andcommitment in implementing the plan, it isrecommended that executive management
incentives are linked to climate
performance indicators.

TCFD Pillar

ICAPs Expectations
LadderGFANZ Transition
Plan Disclosure
Sub-Components

UN High-Level Expert
Group
Recommendations

Governance:- Policy Tiers 1, 2 & 3- Accountability Tiers 3 & 4,
- Board Reporting Tiers 1,
2&3

Governance: Roles,
responsibilities andremuneration

UN4.10: Governance

Governance:- Policy Tiers 1- Accountability Tiers 2- Skills Assessment Tiers
1, 2 & 3

Governance: Skills
and culture10

UN4.10: Governance

Governance:- Policy Tiers 1 & 2- Accountability Tier 4- Board Reporting Tiers 1 &2

Governance: Roles,
responsibilities andremuneration

UN4.10: Governance

Governance:- Accountability Tier 1

Governance: Roles,
responsibilities andremuneration

UN4.10: Governance

Governance

10 GFANZ recommendations also stipulate that disclosers should provide a summary of access to climate-related resources, and the resource requirements

and a change management program needed to embed transition plan elements into culture and practice.
Page 14 of 29t@cdp | www.cdp.net www.cdp.ne

Scenario
Analysis

Strategy toachieve Net
Zero

C3.2, C3.2a,C3.2b (Detailsof scenario
analysis)

Scenario analysis is used as a strategic
tool to inform the development of theclimate transition plan, based on several
potential future climatic states.

Investment:- Risk Management Tiers
1, 2, & 3

Implementation
strategy: activities &decision making

UN4.4: Sectoral
pathways

C3.1(Existence of a
"1.5C world"alignedtransition plan
withinbusinessstrategy &shareholder
feedback)

An organization’s climate transition planshould:- be aligned with a 1.5°C world: to signal
climate ambition.
- be publicly available: to demonstratetransparency.
- integrated into the business strategy: tofulfil the principle of internal coherence.
- have a defined shareholder feedback
mechanism: to incentivize regularfeedback collection.
Here, organizations can explain how
climate-related risks and opportunities
influenced their strategy and climatetransition plan, elaborating on theimplementation through the use of policy
frameworks and requirements that alignbusiness activities with the net zerotransition plan.

Governance:- Policy Tier 3- Planning and Evaluation
Tiers 1, 2, 3 & 4Foundations:Objectives andpriorities11

UN4.1: Transition plan
disclosure

Investment:- Strategy Tiers 1, 2, 3 & 4- Asset Allocation Tiers 1,
2, 3- Additional Target Setting
Tiers 2

Foundations:Objectives andpriorities

C3.3, C-FS3.6,
C-FS3.6a, CFS3.7, CFS3.7a, CFS3.8, CFS3.8a (Link
betweenidentified (andpotential)
climate relatedrisks,
opportunities &company
strategy)

Strategy

Corporate Engagement:- Collective / Collaborative
Engagement Tiers 1 & 2- Bilateral Engagement
Tiers 1, 2 & 3- Corporate Escalation andShareholder Engagement
Tiers 1, 2 & 4

UN4.11: Assumptions
and expectations12

UN4.16: Strategy andimplementation

Implementation
strategy: products
and services,
activities anddecision-making,policies andconditions

Governance:- Policy Tier 4
11

GFANZ elaborates on the need for detail around the use of carbon credits towards interim and final targets, and after the net-zero target is reached. It alsoasks for details pertaining to a Managed Phaseout plan. These are all implicit within CDP’s notion of disclosing comprehensively in line with a credible climatetransition plan, and these details can be attached through disclose to question C3.1.
12
The UN HLEG recommendations outline that businesses should explain how they are contributing to just transition considerations as part of their transition
plans. They recommend that transition plans consider the social consequences and impacts of mitigation actions, including on race, gender, andintergenerational equity.
Page 15 of 29t@cdp | www.cdp.net www.cdp.ne

- Accountability Tier 2- Planning and Evaluation
Tier 4C3.4, C3.5,
C3.5a(Financial
planning
details
associatedwith a 1.5C
world)

Financial
Planning
C-FS4.5, CFS4.5a (Lowcarbonproducts orservices)

Policyengagement

Page 16 of 29t

C12.3,
C12.3a,C12.3b,C12.3c(Alignment ofpublic policy
engagementwith climate
ambition &strategy)

Financial planning is crucial whendemonstrating that an organization isaligning with climate goals (as elaborated
in its climate transition plan), and that it will
be relevant (i.e., profitable) in a 1.5°C
world. Organizations can use these CDPquestions to demonstrate how they havealigned their financial planning with theirclimate transition plan in the reporting year
and at milestone years ‘2025’ and ‘2030’.
Financial details may describe revenue,
CAPEX, and/or OPEX projections which
are crucial for realizing the plan’s ambition.
Organizations can develop their existingand new products or services to supportclients and portfolio companies' efforts totransition, and ultimately to decarbonize
their portfolios over time, all towards a
1.5°C trajectory.

Ensuring that an organization’s climatetransition plan is supported by fully aligned
external policy engagement (policy, law,regulation, and trade associations)demonstrates an ambitious effort towards
achieving a 1.5°C world. For manyorganizations, a successful climatetransition will depend on anaccommodative policy landscape, thus
companies should advocate for climatepositive policies that impact their relevant
sector(s) and are consistent with theirclimate transition plan. Organizations
should also lobby against climate-negative

Investment:- Asset Allocation Tiers 1, 2
&3Foundations:Objectives andpriorities

Governance:- Accountability Tier 2- Planning and Evaluation
Tier 4

Implementation
strategy: activities
and decisionmaking

Investment:- Asset Allocation Tier 4Foundations:Objectives andpriorities

UN4.5: Emissions
reductions andremovals

Implementation
strategy: products
and services

UN4.16: Strategy andimplementation

Corporate Engagement:- Bilateral Engagement Tier
3
Policy Advocacy:- Investor Statements Tiers
1, 2, 3 & 4- Lobbying Tiers 1, 2, 3 & 4- Advocacy Tiers 1, 2, 3 &4Engagement
strategy:
government andpublic sector

UN4.7: Aligned
spending and revenue
UN4.16: Strategy andimplementation
UN4.19: Solution
financingUN4.19: Solution
financingUN4.8: Addressing
data limitations
UN4.15: Lobbying andpolicy engagement@cdp | www.cdp.net www.cdp.ne

policies which could affect their ability totransition.

Value chain
engagement &Low-carbon
initiatives

Risks &
Opportunities

C4.3b (Lowcarboninitiatives direct
operations)

One of the key elements of a climatetransition plan is that it contains timebound actions to decarbonize businessprocesses and implement emissions
reduction initiatives.

C12.1,
C12.1a,C12.5, CFS12.1b, CFS12.1c, CFS12.2, CFS12.2a(Value chain
engagement)

Financial institutions can only achievescience-based net zero targets through thedecarbonization of their portfolios; hence,value chain engagement plays a significant
role in realizing a climate transition plan.
Through their engagement with clients andportfolio companies, by exercising voting
rights as shareholders, and throughcollaborative industry engagements,
financial institutions can support andmotivate a wider credible transition to net
zero.

C2.1, C2.2, CFS2.2b, CFS2.2c, CFS2.2d, CFS2.2e(Process for
identifying
climate relatedrisks &
opportunities)

To demonstrate forward planning (which is
crucial for a climate transition plan), an
organization’s transition plan should
include or reflect a process for identifying,assessing, and responding to climate
related risks and opportunities. This should
focus in particular on risks andopportunities that financial institutions are
exposed to through their portfolios.

Investment:- Additional Target Setting
Tier 3Disclosure:- Commitments, Objectives& Targets Tier 313
Investment:- Strategy Tiers 2 & 3- Asset Allocation Tiers 1, 2
&3- Additional Target Setting
Tier 2
Corporate Engagement:- Collective/ Collaborative
Engagement Tiers 1 & 2- Bilateral Engagement
Tiers 1, 2, 3 & 4- Corporate Escalation andShareholder Engagement
Tiers 1, 2, 3 & 4
Investment:- Risk Management Tier 4

RiskManagement

UN4.5: Emissions
reductions andremovalsEngagement
strategy: clients andportfolio companies,
industry

UN4.6: Value chain
actionUN4.8: Addressing
data limitations
UN4.18: Stewardship,
offsets, and risk
management

Foundations:Objectives andpriorities

UN4.16: Strategy andimplementation
UN4.18: Stewardship,
offsets, and risk
management

13 CDP has not listed here the full list of sub-elements within the Disclosure tier of the ICAPs Expectations Ladder, as these apply widely across the whole

CDP questionnaire. They are noted here to indicate the alignment between CDP’s elements of a credible climate transition plan, and to the ICAPs framework.
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TargetsC2.3, C2.3a(Climate
related risks risks, potential
financial
impact andresponse
strategy)
C2.4, C2.4a(Climate
relatedopportunities opportunities,
potential
financial
impact andresponse
strategy)
C4.1, C4.1a,
C4.1b, CFS4.1d(Emissions
reduction
targets absolute &
intensity)
C4.2a, C4.2b(Other climate
relatedtargets)

Details of the risks posed to anorganization by climate-related issues, andthe estimated potential financial impact ofthese risks at the corporate level, as wellas the response strategy to manage theserisks.

*Disclosure:- Portfolio Assessment Tier
314

Foundations:Objectives andpriorities

UN4.16: Strategy andimplementation

Details of the opportunities posed to anorganization by climate-related issues, andthe estimated potential scale of theseopportunities at the corporate level as wellas the response strategy required to takeadvantage of these opportunities.

*Disclosure:- Portfolio Assessment Tier
315

Foundations:Objectives andpriorities

UN4.1: Transition plan
disclosure16

The plan includes near- and long-term,
verified science-based targets, including
for their portfolios and all financed
emissions, which are in line with the latest
climate science to reach a 1.5°C world,with time-bound KPIs. Where this is not
feasible, the targets should align to CDP
recommended best practice.
Ambitious climate transition plans will
include other climate related targets,
including, but not limited to, increased lowcarbon energy consumption or production
targets.

Investment:- Alignment Target Tiers 1,
2&3- Additional Target Setting
Tiers 1, 2 & 3

Metrics and targets

UN4.2: Targets

Investment:- Alignment Target Tiers 1,
2&3- Additional Target Setting
Tier 1

Metrics and targets

UN4.12: Annual
reporting

Metrics &Targets
UN4.2: Targets
UN4.14: Natural
ecosystems17

14 See footnote 13.
15 See footnote 13.
16 Opportunity assessment and management are implicitly part of a comprehensive transition plan. These relate in particular to research and development

aspect denoted within UN4.1.
17 Organisations can disclose various targets pertaining to their management of natural ecosystems within C4.2b. More generally, with deforestation and water
security both posing substantial financial risks to companies and their financiers and given that there are no routes to a 1.5°C future without tackling climate
and nature together, disclosing financial institutions are encouraged to complete the forests and water-related questions where applicable, to comprehensively
indicate the alignment of their actions to protect natural ecosystems. They can do so via the FW-FS module at the end of the climate change questionnaire.
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C4.2c (Netzero targets)

Scope 1, 2 &3
accounting
with verification

C5.2, C6.1,
C6.3, C6.5,
C10.1a,C10.1b,C10.1c, CFS14.1, CFS14.1a, CFS14.1b, CFS14.1c(Comprehensive and thirdparty verified
emissionsaccounting)

The plan includes a net zero target, in linewith the latest climate science, with timebound KPIs. Third-party verification isconsidered best practice.

A climate transition plan should beaccompanied by a complete, accurate,transparent, consistent, and relevant
inventory of all three scopes of emissions.
Any individual organization may find it
important to fully disclose to C5 – C10 and
C14, with an emphasis on portfolio
emissions and other portfolio impact
metrics.
• Third-party verification is necessary forcredibility and transparency on progressagainst a climate transition plan.
• Companies should calculate and disclose
all material categories of scope 3 andprovide an explanation for categories thatare not relevant.

Investment:- Alignment Target Tiers 1&2- Additional Target Setting
Tier 1

Investment:- Alignment Target Tiers 1&4Foundations:Objectives andpriorities

UN4.2: Targets

Metrics and targets

UN4.5: Emissions
reductions andremovals

Metrics and targets

UN4.17: Net zeroacross all asset classes
and services
UN4.2: Targets
UN4.3: Verification
UN4.12: Annual
reporting

Key:
Full coverage: There is full coverage of the disclosure recommendations set by this framework by CDP’s climate change questionnaire,
via the components noted in the box. I.e. CDP’s questionnaire meets (and in some cases, exceeds) the disclosure recommendations set by thisframework.
Partial coverage: There is partial coverage between CDP’s climate change questionnaire and the disclosure recommendations set bythis framework. At a high-level, any key differences are noted as footnotes.
Not applicable: The mapped framework does not require the disclosure of this information, whereas CDP’s questionnaire does.

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3.2 Reporting Against Net Zero Commitments
Tables 2-6 list each section of the net zero commitments of NZAM, NZAOA, NZBA, NZIA and
PAAO, providing a list of relevant questions in CDP’s climate change questionnaire.
Organisations can use this list to disclose information relevant to their net zero commitments
made with these alliances.
Note that NZAM and PAAO include commitments to reporting in line with the TCFD
recommendations. CDP has published a detailed technical note mapping all TCFD-aligned
climate change questions, which can be used alongside this technical note. For brevity, the
TCFD-aligned questions have not all been listed in this document. The specific parts of thesecommitments are:
 NZAM Commitment 10: Publish TCFD disclosures, including a climate action plan,annually, and submit them to the Investor Agenda via its partner organisations forreview to ensure the approach applied is based on a robust methodology, consistent
with the UN Race to Zero criteria, and action is being taken in line with thecommitments made here.
 PAAO Commitment 10: Reporting annually on the strategy and actions implemented
and progress towards achieving objectives and targets, and in line with the Task
Force on Climate-related Financial Disclosures (TCFD) recommendations.

Page 20 of 29@cdp | www.cdp.net www.cdp.netTable 2: Net Zero Asset Managers Initiative (NZAM) Commitment – Disclosure Indicators
Net Zero Asset Managers Initiative (NZAM) Commitment

2023 CDP Questions for
the Financial Services
sectorMy organisation commits to support the goal of net zero greenhouse gas (‘GHG’) emissions by 2050, in line with global
efforts to limit warming to 1.5°C (‘net zero emissions by 2050 or sooner’). It also commits to support investing alignedwith net zero emissions by 2050 or sooner.

C-FS4.1d, C4.2c, C-FS12.1b,
C12.5

a. Work in partnership with asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero
emissions by 2050 or sooner across all assets under management (‘AUM’).
b. Set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by
2050 or sooner.
c. Review our interim target at least every five years, with a view to ratcheting up the proportion of AUM covered until
100% of assets are included.
1. Set interim targets for 2030, consistent with a fair share of the 50% global reduction in CO2 identified as a requirementin the IPCC special report on global warming of 1.5°C.

C4.1, C4.1a, C4.1b, C-FS4.1d

2. Take account of portfolio Scope 1 & 2 emissions and, to the extent possible, material portfolio Scope 3 emissions.

C-FS14.1, C-FS14.1a, CFS14.1b, C-FS14.1c

3. Prioritise the achievement of real economy emissions reductions within the sectors and companies in which we invest.

C-FS2.2b, C-FS2.2c, CFS3.6a, C4.3c, C-FS12.1c, CFS14.3, C-FS14.3a

4. If using offsets, invest in long-term carbon removal, where there are no technologically and/or financially viable
alternatives to eliminate emissions.

C3.5, C3.5a, C11.2, C11.2a

5. As required, create investment products aligned with net zero emissions by 2050 and facilitate increased investment
in climate solutions.

C-FS4.5, C-FS4.5a

6. Provide asset owner clients with information and analytics on net zero investing and climate risk and opportunity.

C-FS2.2b, C-FS2.2c, CFS12.1bPage 21 of 29t@cdp | www.cdp.net www.cdp.ne7. Implement a stewardship and engagement strategy, with a clear escalation and voting policy, that is consistent with
our ambition for all assets under management to achieve net zero emissions by 2050 or sooner.

C-FS2.2e, C-FS3.6, C-FS3.6a,
C-FS3.6b, C-FS3.7, C-FS3.7a,
C-FS12.1c, C-FS12.2, CFS12.2a

8. Engage with actors key to the investment system including credit rating agencies, auditors, stock exchanges, proxyadvisers, investment consultants, and data and service providers to ensure that products and services available toinvestors are consistent with the aim of achieving global net zero emissions by 2050 or sooner.

C12.1d9. Ensure any relevant direct and indirect policy advocacy we undertake is supportive of achieving global net zero
emissions by 2050 or sooner.

C12.3, C12.3a

10. Publish TCFD disclosures, including a climate action plan, annually, and submit them to the Investor Agenda via its
partner organisations for review to ensure the approach applied is based on a robust methodology, consistent with the
UN Race to Zero criteria, and action is being taken in line with the commitments made here.

C3.1, C12.4

Table 3: Net-Zero Asset Owner Alliance (NZAOA) Commitment – Disclosure Indicators
Net-Zero Asset Owner Alliance (NZAOA) Commitment

2023 CDP Questions for
the Financial Services
sectorMy organization commits to transitioning its investment portfolios to net-zero GHG emissions by 2050 consistent
with a maximum temperature rise of 1.5°C above pre-industrial levels, taking into account the best available scientificknowledge including the findings of the IPCC, and regularly reporting on progress, including establishing intermediatetargets every five years in line with the Paris Agreement Article 4.9.

C 3.5, C 3.5a, C 4.1, C 4.1c,
C-FS 4.1d, C 4.2c,
C 4.3c, C-FS14.3

My organization fully endorses and understands in order to meet our fiduciary duty to manage risks and achievetarget returns, this Commitment must be embedded in a holistic approach to managing sustainability
considerations, incorporating but not limited to, climate change, and must emphasize GHG emissions reduction
outcomes in the real economy.

C 2.1, C-FS 2.2b, C 3.1,
C 3.3, C 3.4, C-FS 3.6,
C-FS 12.2

My organization will seek to reach this Commitment, especially through advocating for, and engaging on, corporate
and industry action, as well as public policies, for a low-carbon transition of economic sectors in line with scienceand under consideration of associated social impacts.

C-FS 3.7a, C-FS 12.1c,
C 12.1d, C 12.1e, C12.3,
C 12.3b, C 12.3c, C 12.5,
C-FS 14.3a

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Tracking and communicating on progress, by• setting intermediate individual targets, in line with the Alliance’s Target-Setting Protocol, within 12 months ofjoining• publishing intermediate individual targets• disclosing annually and publicly on progress towards intermediate individual targets, including on investment
portfolios’ emissions profile and emissions reductions• reporting intermediate individual targets and annually on progress towards intermediate individual targets, via theinternal Alliance reporting template/tool for aggregation and publication in the Alliance progress report• where the Alliance has or establishes a Position, considering1 to adopt and publish, where applicable, acorresponding individual investment policy or approach, informed by the Alliance’s Position, as applicable withintwelve months of joining the Alliance, or within twelve months of publication of the Alliance Position

C-FS 3.6a, C-FS 3.6b,
C-FS 3.7, C 12.4,
C-FS 14.1

Table 4: Net-Zero Banking Alliance (NZBA) Commitment – Disclosure Indicators
Net-Zero Banking Alliance (NZBA) Commitment

2023 CDP Questions for
the Financial Services
sectorTransition all operational and attributable GHG emissions from our lending and investment portfolios to align withpathways to net-zero by mid-century, or sooner, including CO2 emissions reaching net-zero at the latest by 2050,
consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100. This approach will take into
account the best available scientific knowledge, including the findings of the IPCC, so we commit to review and (ifnecessary) revise our targets at least every five years after the target is set.

C 3.1, C 3.5, C-FS 4.1d,
C 4.2cUse decarbonization scenarios which: are from credible and well-recognized sources; are no/low overshoot; relyconservatively on negative emissions technologies; and to the extent possible, minimize misalignment with otherSustainable Development Goals. We will provide a rationale for the scenario(s) chosen.

C 3.2, C 3.2a, C 3.2bPrioritize our efforts where we have, or can have, the most significant impact, i.e. the most GHG-intensive and GHGemitting sectors within our portfolios, which are key to the transition to a net-zero carbon economy

C-FS 2.2b, C 3.3

Use the bank-led UNEP FI Guidelines for Climate Target Setting for Banks (“Guidelines”) to set scenariobased intermediate targets for 2030, or sooner, for priority GHG-intensive and GHG-emitting sectors.

C 4.1cPublish annually and share with UNEP FI for review, to monitor consistency with the UN Race to Zerocriteria and evidence that action is being taken in line with the commitments made here:

C 1.1b, C-FS 3.6,
C-FS 3.6a, C-FS 3.6b,
C 4.1, C 12.4,

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•••progress against absolute emissions and/or emissions intensity targets following relevant international andnational GHG emissions reporting protocols and/or climate portfolio alignment methodologies;
progress against a board-level reviewed transition strategy setting out proposed actions and climate-related
sectoral policies; anddisclosure for key sectors will be made within one year of setting of the target.

We will meet this commitment through:• facilitating the necessary transition in the real economy through prioritising client engagement, and offering
products and services to support clients’ transition;• engaging on corporate and industry (financial and real economy) action, as well as public policies, to help
support a net-zero transition of economic sectors in line with science and giving consideration to associatedsocial impacts; and• supporting innovation, the near-term deployment of existing viable technologies, and scaling up the financing ofcredible, safe, and high-quality climate solutions that are compatible with other Sustainable Development Goals.
In implementing and reaching targets for all Scopes of emissions, offsets can play a role to supplement decarbonisationin line with climate science. The reliance on carbon offsetting for achieving end-state net zero should be restricted tocarbon removals to balance residual emissions where there are limited technologically or financially viable alternatives toeliminate emissions. Offsets should always be additional and certified.

C-FS 14.1, C-FS 14.2b

C-FS 2.2e, C 3.5a,
C-FS 3.8, C-FS 3.8a,
C 4.3c, C-FS 4.5,
C-FS 12.1b, C 12.1d,
C-FS 12.2, C 12.3,
C 12.5, C-FS 14.3a

C11.2, C11.2a

Table 5: Net-Zero Insurance Alliance (NZIA) Commitment – Disclosure Indicators
Net-Zero Insurance Alliance (NZIA) Commitment

2023 CDP Questions for
the Financial Services
sectorTransitioning all operational and attributable greenhouse gas (GHG) emissions from its insurance and reinsurance
underwriting portfolios to net-zero emissions by 2050 consistent with a maximum temperature rise of 1.5°C above preindustrial levels by 2100 in order to contribute to the implementation of the COP21 Paris Agreement...

C 3.1, C 3.2, C-FS 14.3

Establishing, to the extent permissible by applicable laws and regulations, its intermediate, science-based targets
every five (5) years in line with Article 4.9 of the Paris Agreement...

C 4.1, C-FS 4.1d, C 4.2c, CFS 14.1

Supporting the implementation of corporate disclosure frameworks relevant to the net-zero transition and theinsurance industry...

C 12.5

Supporting the implementation of global policy frameworks relevant to the net-zero transition and the insurance
industry...

C 12.5

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Signing the UN Principles for Sustainable Insurance prior to or upon joining the NZIA, or at the latest within one yearof joining the NZIA.

C 12.5

Seek to meet this Commitment through net-zero approaches relevant to insurance and reinsurance underwriting
portfolios, in such a manner that is at the discretion of my company and in accordance with applicable laws andregulations...

C 2.1, C-FS 2.2b,
C-FS 2.2e, C 3.3, C 3.5, C
3.5a, C-FS 3.6
C-FS 3.6a, C-FS 3.6b,
C 4.3c, C-FS 4.5,
C-FS 12.1b, C 12.3,

Aim to transition its investment portfolio to net-zero GHG emissions by 2050 and consider joining relevant initiatives (e.g.
Net-Zero Asset Owner Alliance) in order to achieve, within my company, a consistent approach to net zero

C12.5, C-FS14.3

Work together with insurance associations, insurance and financial regulators and supervisors, governments, tradebodies, policymakers, the UN and other intergovernmental organisations to promote the goals of the NZIA, and to seek
consistency of regulatory, supervisory and governmental policy frameworks with the net-zero transition.

C 12.3bEngage with non-member insurance industry, financial sector peers and trade bodies; leading scientific methodologicaland data-related organizations; academia; non-governmental organizations; and other key stakeholders on the goals of
the NZIA.

C 12.1d, C 12.3b

Table 6: Paris Aligned Asset Owners (PAAO) Commitment – Disclosure Indicators
Paris Aligned Asset Owners (PAAO) Commitment

2023 CDP Questions for
the Financial Services
sector

General Commitment: Our institution’s commitment recognises that investors across the globe have different
opportunities, constraints and starting points for achieving net zero emissions and there are a range of methodologies
and approaches available to investor to set targets and implement strategies. In some asset classes or for someinvestments strategies, agreed net zero methodologies do not yet exist. We will, therefore, work to address thesechallenges, including through the Paris Aligned Investment Initiative

C12.5

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1. Transitioning our investments to achieve net zero portfolio GHG emissions by 2050

C3.1, C3.5

2. Implementing this commitment with the aim of achieving real economy emissions reductions and undertaking acomprehensive set of actions available to investors, drawing on the Paris Aligned Investment Initiative’s Net Zero
Investment Framework.

C4.3c, C-FS14.3,
C-FS14.3a

3. Setting objectives and targets, including an interim target for 2030 or sooner for reducing Scope 1,2 and 3 emissions
associated with our portfolios and setting a target for increasing investment in climate solutions, consistent with a fairshare of the 50% global reduction in CO2 identified as a requirement in the Intergovernmental Panel on Climate change
special report on global warming of 1.5°C.

C4.1, C4.1a, C4.1b,
C-FS4.1d, C4.2c,
C-FS14.1, C-FS14.1a,
C-FS14.1b, C-FS14.1c

4. Where offsets are necessary where there are no technologically and/or financially viable alternatives to eliminate
emissions, investing in long-term carbon removals.

C11.2, C11.2a

5. Ensure any direct and collective policy advocacy we undertake supports policy and regulation relevant for achieving
global net zero emissions by 2050 or sooner.

C12.3, C12.3a, C12.3b

6. Implementing a stewardship and engagement strategy, with clear voting policy that is consistent with an objective for
all assets in the portfolio to achieve net zero emissions by 2050 or sooner.

C-FS2.2e, C-FS3.6,
C-FS3.6a, C-FS3.6b,
C-FS12.1c, C-FS12.2,
C-FS12.2a
C-FS3.7, C-FS3.7a,
C-FS4.5, C-FS4.5a, C12.1d

7. Engaging with asset managers, credit rating agencies, auditors, stock exchanges, proxy advisers, investment
consultants, and data and service providers to ensure that funds, products and services available to investors are
consistent with achieving global net zero emissions by 2050 or sooner.
8. Setting a target and reducing our operational (Scope 1 and 2) emissions in line with achieving global net zero
emissions by 2050, or sooner.

C4.1, C4.1a, C4.1b, C4.2c,
C5.2, C5.3, C6.1, C6.3

9. Disclosing objectives and targets, and publishing a clear Investor Climate Action Plan for achieving these goals assoon as possible, no later than one year from making this commitment, and reviewing and updating targets every five
years or sooner.

C3.1, C4.1, C4.1a, C4.1b, CFS4.1d, C4.2c, C12.4

10. Reporting annually on the strategy and actions implemented and progress towards achieving objectives and targets,and in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

C12.4, C-FS14.3

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4. Appendix & references
Appendix A: UN HLEG Recommendation 4 Indicators
HLEG Recommendation 4: Creating a Transition Plan

CDP Indicator

Non-state actors must publicly disclose comprehensive and actionable net zero transition plans which indicate actions thatwill be undertaken to meet all targets, as well as align governance and incentive structures, capital expenditures, researchand development, skills and human resource development, and public advocacy, while also supporting a just transition.
Transition plans should be updated every five years and progress should be reported annually.

UN4.1: Transition plan
disclosure

Disclose short-, medium- and long-term absolute emission reduction targets, and, if relevant, relative emission reduction
targets. Targets must account for all greenhouse gas emissions and include separate targets for materials non-CO2
greenhouse gas emissions.

UN4.2: Targets

Detail the third-party verification approach and audited accuracy.

UN4.3: Verification

Reference credible sector pathways consistent with limiting warming to 1.5°C with no or limited overshoot (e.g. IPCC,
Network for Greening the Financial System (NGFS), One Earth Climate Model (OECM)) and explain any materials
difference between the non-state actor’s transition plan and sector pathways

UN4.4: Sectoral pathways

Explain emissions reductions and, if needed, removal actions with time-bound key performance indicators. If removals areneeded, explain why.

UN4.5: Emissions reductions
and removals

Demonstrate how specific actions across all parts of the non-state actors’ value chain will meet near-, medium- and longterm targets.

UN4.6: Value chain action

Disclose how capital expenditure plans, research and development plans and investments are aligned with all targets (e.g.
capex-alignment with a regional or national taxonomy) and split between new and legacy or stranded assets.
Outline actions to address any data limitations.

UN4.7: Aligned spending andrevenue
UN4.8: Addressing data
limitations

Detail value chain (e.g. suppliers) engagement approach.

UN4.9: Value chain engagement

Explain governance structure for transition and verification. Describe linking of near- and long-term targets with executive
compensation.

UN4.10: Governance

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Outline the specific policies and regulations, including carbon pricing, needed to facilitate transition plans.

UN4.11: Assumptions andexpectations

Report on progress annually – especially in regards to targets, and explain plan changes on an annual basis.

UN4.12: Annual reporting

Transition plans should explain how the non-state actor is contributing to a Just Transition. The delivery of a net zero andclimate resilient economy in a way that delivers fairness and tackles inequality and injustice. These transition plans must
consider and address the broader social consequences and impacts of mitigation actions, including on race, gender andintergenerational equity. Examples could include:

UN4.13: Just transition• a company, in partnership with its workers, unions, communities and suppliers has developed a Just Transition Plan;• a company discloses how its plan integrates the United Nations Declaration on the Rights of Indigenous Peoples(UNDRIP) and specifically the principle of free, prior and informed consent.
Specify how to achieve and maintain operations and supply chains that avoid the conversion of remaining natural
ecosystems— eliminating deforestation, wetland and peatland loss by 2025 at the latest, and the conversion of otherremaining natural ecosystems by 2030.

UN4.14: Natural ecosystems

Disclose how lobbying and policy engagement policies and activities are consistent with the non-state actor’s net zerotargets.

UN4.15: Lobbying and policy
engagement

Demonstrate how all parts of the business (investment advisory, investment, facilitation, etc.) align with interim targets andlong-term net zero targets, including a strategy to identify and progressively phase out stranded assets.

UN4.16: Strategy andimplementation

For those asset classes or services for which emissions cannot (at least to date) be calculated, explain how net zerocommitments are addressed or considered.

UN4.17: Net zero across all
asset classes and services

Include engagement targets that include voting (especially proxy) strategies in line with decarbonisation and escalation
policies, policies on carbon credits and offsets, and the institution’s transition risk management strategy, including physicalrisk.

UN4.18: Stewardship, offsets,
and risk management

Demonstrate alignment to funding and enabling real-world decarbonisation (e.g. green taxonomies), and contribute to help
financing net zero goals in developing markets via blended finance and other financial vehicles.

UN4.19: Solution financing

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5. Useful Resources
More information about CDP’s questionnaires, associated reporting guidance, and technical notes detailing the alignment of CDP’squestionnaires to TCFD and transition plans:• Questionnaires and Reporting Guidance for disclosing companies (2023)• FAQs for companies, [including guidance for how to disclose to CDP even if you have not been requested to] (2023)• Climate Transition Plan: Discussion Paper (2021)• CDP Technical Note: Reporting on Transition Plans (2023)• CDP Technical Note on the TCFD (2023)
The net zero commitment statements and guidance documents referenced throughout this document:• Net Zero Asset Managers Initiative, The Net Zero Asset Managers Commitment (2021)• UN-convened Net-Zero Asset Owner Alliance, Commitment Document for Participating Asset Owners (April 2022)• UN-convened Net-Zero Banking Alliance, Commitment Statement (April 2021)• The Net-Zero Insurance Alliance, Statement of commitment by signatory companies (July 2021)• The Paris Aligned Investment Initiative, Net Zero Asset Owner Commitment (March 2021)• The Investor Agenda, Investor Climate Action Plans (ICAPs) Expectations Ladder (May 2021)• Glasgow Financial Alliance for Net Zero, Financial Institution Net-zero Transition Plans (November 2022)• United Nations’ High-level Expert Group on the Net Zero Emissions Commitments of Non-State Entities, Integrity Matters: Net Zero
Commitments by Businesses, Financial Institutions, Cities and Regions (November 2022)

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