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Investors Measure Net-Zero Sincerity With Novel Climate Metric

  • Goldman, BlackRock are part of group focused on emissions data
  • Portfolio alignment metrics aren’t currently widely used
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Talk is cheap in the world of climate finance, so a group of analysts from firms including Goldman Sachs Group Inc. and BlackRock Inc. have offered new guidance on a nascent technique to help track whether banks and asset managers are following through on their pledges to decarbonize their portfolios in line with the goals of the Paris Agreement. 

By using current emissions data as well as estimated future emissions, so-called portfolio alignment metrics can help investors measure whether the companies they finance are moving towards net zero at a pace consistent with the Paris accord target of limiting global temperature increases to 1.5° Celsius. The Portfolio Alignment Team, which was formed by former Bank of England Governor Mark Carney and also includes representatives from Bank of America Corp. and HSBC Holdings Plc, said in a statement this information should also offer insight into how fast the finance sector is moving in supporting the low carbon transition.