The Beta version of the Climate Impact Management System by 2DII’s Evidence for Impact Program and ADEME, aims to help financial institutions design scientifically sound climate impact strategies and is now open for consultation
The Climate Impact Management System
Recently, there has been a surge in financial sector initiatives focused on climate-related targets or strategies, with a number of big industry names making Net-Zero targets in the past few months alone.
However, some commitments have centered on targets that are decades away, with little clarity on the near-term actions that will be undertaken to meet these targets. Additionally, there has been limited focus on understanding how these kinds of initiatives will contribute to impact – that is, greenhouse gas emissions reductions – in the real economy.
The last report named The Climate Impact Management System aims to fill this gap, by providing FIs with a clear roadmap to develop, refine, and communicate on impactful climate strategies. The system was developed by 2DII’s Evidence for Impact Program and the French Ecological Transition Agency (ADEME), as part of the Finance ClimAct project.
The framework is primarily designed for financial institutions, but can also inform the development of labelling or certification schemes for financial products. It is particularly valuable for financial institutions that have undertaken long-term Net-Zero commitments and want to set up near-term plans to actively contribute to these commitments. The framework can be applied at the product, business line, or institutional level.
How to apply the Impact Management System?
The Impact Management System consists of several steps, per the graphic below. First, it guides FIs in defining the best possible contribution that they can make to climate change mitigation, based on the available science and their specific constraints (steps 1 & 2). Then, it guides them in planning for this contribution (step 3) and monitoring it (steps 4 & 5). Step 6 outlines a process for continuous improvement of the contribution. Finally, step 7 offers guidance on how to communicate on the contribution and disclose the process.
Stakeholders are invited to offer feedback by June 7th and/or participate in road-testing the framework.