New SBTi Financial Institutions Net-Zero Standard
Briefing for Australian
Institutional Investors
On 17 June 2026, the Global Advisory Alliance hosted a briefing for Australian institutional investors on the SBTi Financial Institutions Net-Zero Standard.
The session explored how investors can use science-based targets to move from climate ambition to practical implementation.
Speakers discussed recent developments within SBTi, the challenges of climate data and target setting, and lessons from leading Australian investors.
The discussion focused on one core question: How can institutional investors set credible climate targets and translate them into meaningful real-world outcomes?
Watch the session replay
Use this briefing to understand how SBTi targets and SBTi sustainability standards are being applied by financial institutions in practice.
Key takeaways
Key takeaways from the Australia GAA SBTi discussion: The discussion highlighted that net-zero target setting is evolving from a compliance exercise into a practical investment management tool. Speakers focused on how Australian investors can use SBTi standards to improve portfolio management, strengthen stewardship, and drive real-economy decarbonisation.
1. Science-based targets provide credibility and accountability
2. Net-zero targets must be supported by implementation
The session stressed that targets alone are not enough.
+ Long-term net-zero commitments require credible near-term and interim targets.
+ Investors need clear implementation plans to demonstrate how targets will be achieved.
+ Climate targets should be integrated into investment processes, portfolio management, and engagement activities.
+ Transition plans are becoming an essential component of credible climate strategies.
+ Long-term net-zero commitments require credible near-term and interim targets.
+ Investors need clear implementation plans to demonstrate how targets will be achieved.
+ Climate targets should be integrated into investment processes, portfolio management, and engagement activities.
+ Transition plans are becoming an essential component of credible climate strategies.
3. Data quality remains a major challenge, particularly in private markets
Access to reliable emissions data continues to be one of the biggest barriers to implementation.
+ Many private companies still lack the systems and expertise needed to measure emissions accurately.
+ Investors often rely on estimated emissions data where direct reporting is unavailable.
+ Improving data quality is viewed as an ongoing journey rather than a one-time exercise.
+ Practical efforts to improve emissions measurement can deliver significant improvements in portfolio transparency.
+ Many private companies still lack the systems and expertise needed to measure emissions accurately.
+ Investors often rely on estimated emissions data where direct reporting is unavailable.
+ Improving data quality is viewed as an ongoing journey rather than a one-time exercise.
+ Practical efforts to improve emissions measurement can deliver significant improvements in portfolio transparency.
4. Engagement is often more effective than exclusion
The discussion highlighted the importance of working directly with portfolio companies.
+ Metrics Credit Partners shared how they partnered with portfolio companies to help them measure emissions and understand climate reporting requirements.
+ Investors can play an active role in building climate capability among investee companies.
+ Stewardship and engagement can drive emissions reductions that would not occur through divestment alone.
+ The goal is to help companies improve their climate performance rather than simply remove them from portfolios.
+ Metrics Credit Partners shared how they partnered with portfolio companies to help them measure emissions and understand climate reporting requirements.
+ Investors can play an active role in building climate capability among investee companies.
+ Stewardship and engagement can drive emissions reductions that would not occur through divestment alone.
+ The goal is to help companies improve their climate performance rather than simply remove them from portfolios.
5. Investors are shifting focus from portfolio decarbonisation to real-economy outcomes
Several speakers cautioned against relying solely on portfolio emissions reductions as a measure of success.
+ Reducing portfolio emissions does not automatically reduce real-world emissions.
+ Simple divestment strategies can create "paper decarbonisation" without changing underlying economic activity.
+ Investors are increasingly focused on whether companies have credible transition plans, emissions targets, and capital allocation strategies.
+ The emphasis is shifting towards supporting actual emissions reductions in the real economy.
+ Reducing portfolio emissions does not automatically reduce real-world emissions.
+ Simple divestment strategies can create "paper decarbonisation" without changing underlying economic activity.
+ Investors are increasingly focused on whether companies have credible transition plans, emissions targets, and capital allocation strategies.
+ The emphasis is shifting towards supporting actual emissions reductions in the real economy.
6. Climate action increasingly requires multiple investment levers
The discussion reflected a broader evolution in investor climate strategies.
+ Target setting remains important, but it is now viewed as one element of a broader toolkit.
+ Investors are combining targets with stewardship, engagement, transition planning, and climate solution investments.
+ Asset owners are using targets to signal expectations to external managers.
+ Capital allocation towards climate solutions is becoming a growing area of focus alongside emissions reduction efforts.
+ Target setting remains important, but it is now viewed as one element of a broader toolkit.
+ Investors are combining targets with stewardship, engagement, transition planning, and climate solution investments.
+ Asset owners are using targets to signal expectations to external managers.
+ Capital allocation towards climate solutions is becoming a growing area of focus alongside emissions reduction efforts.
7. The Australian market continues to strengthen its climate commitments
Australian asset owners and asset managers continue to advance climate target setting despite a changing global environment.
+ Net-zero commitments remain widely adopted across the market.
+ Coverage of interim climate targets continues to expand across asset classes.
+ Asset managers are generally leading asset owners in public target disclosure.
+ Industry initiatives such as the Net Zero Asset Managers Initiative continue to play an important role in supporting investor action and accountability.
+ Net-zero commitments remain widely adopted across the market.
+ Coverage of interim climate targets continues to expand across asset classes.
+ Asset managers are generally leading asset owners in public target disclosure.
+ Industry initiatives such as the Net Zero Asset Managers Initiative continue to play an important role in supporting investor action and accountability.
For those interested in perspectives from Canadian institutional investors, key insights from the Canadian SBTi briefing are available here: https://www.globaladvisoryalliance.com/sbti-financial-institutions-net-zero-standard-canada
This briefing gives you a practical overview of:
- What the SBTi is and how its standards are evolving
- Why SBTi targets matter for financial institutions
- How more than 180 financial institutions have already set validated SBTi targets
- How the new SBTi Financial Institutions Net-Zero Standard expands coverage across lending, investing, insurance underwriting and capital markets
- How portfolio alignment, climate solutions and transition finance are treated under the standard
Next steps:
Interested in setting or validating SBTi targets? Contact the Science Based Targets initiative to learn more about the Financial Institutions Net-Zero Standard and validation process.
Visit links blow wiht SBTi resources - target setting for financial institutions:
SBTi The Financial Institutions Net-Zero Standard
SBTi FINANCIAL INSTITUTIONS NET-ZERO STANDARD FREQUENTLY ASKED QUESTIONS (FAQs)
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