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RMI, in cooperation with main international banks—BNP Paribas, Citi, Crédit Agricole CIB, Societe Generale, and Customary Chartered—and in session with trade, specialists, and extra monetary establishments has developed a first-of-its-kind framework to allow banks to measure and disclose their aviation lending portfolios’ emissions in a constant and complete method.

As we speak, RMI introduced the launch of the Pegasus Pointers, the primary voluntary climate-aligned finance framework for the aviation sector, designed to assist banks independently measure and disclose the emissions depth and/or local weather alignment of their aviation lending portfolios in comparison with a 1.5°C state of affairs.

The aviation trade contributes 2.5% of worldwide CO₂ emissions and is the quickest rising transportation sector. The trade’s success in transitioning to a low-carbon financial system will depend on a big ramp up of sustainable aviation fuels (SAF), in addition to additional improvement of hydrogen and battery-electric propulsion and fleet modernization. Monetary establishments can play an vital function in supporting a variety of options for the sector via financing the applied sciences, tasks, and firms that may contribute to a low carbon future.

The aviation sector’s potential to decarbonize depends on driving progress throughout a set of key expertise levers—a few of which they’ve the power to affect immediately, and a few of which would require collaboration throughout sectors and with policymakers. Underpinning the Pegasus Pointers is an understanding that monetary establishments and airways should work collectively to foster options that may assist the trade decarbonize, along with policymakers, prospects, airports, gas producers, and NGOs. Collaboration with banks, traders, and policymakers might be notably vital to speed up the manufacturing of SAF—essentially the most important lever of decarbonization for the sector.

The Pegasus Pointers had been designed by RMI and formed by a core working group of main monetary establishments and draw upon current requirements together with these of the Science-Primarily based Targets initiative (SBTi) and the Worldwide Civil Aviation Group’s Carbon Offsetting and Discount Scheme for Worldwide Aviation (ICAO CORSIA). Professional bono authorized recommendation was supplied by Watson Farley & Williams all through improvement. The framework is designed to be suitable with the Internet-Zero Banking Alliance’s pointers.

Along with the 5 banks who supported improvement of the Pointers, RMI is happy to share that a further two monetary establishments will take up this system—Caixa Financial institution and CIC—and two are testing implementation of the methodology and assessing future utilization of the Pointers—ING and Export Improvement Financial institution of Canada.

Grace Cheung, Basic Supervisor of Sustainability at Cathay Pacific Airways​ mentioned, “We welcome the financing group’s efforts to standardize the evaluation of the local weather influence of their aviation portfolios. At Cathay, we consider collaboration is vital to a sustainable future and are dedicated to our ‘Greener Collectively’ imaginative and prescient. We hope the Pegasus Pointers might be broadly adopted.”

Just like frameworks accomplished for metal (Sustainable Metal Ideas), delivery (Poseidon Ideas), and aluminum (Sustainable Aluminum Finance Framework), the monetary establishments that leverage the Pegasus Pointers might be geared up to:

• Carry out a standardized evaluation to calculate their portfolio emissions depth and alignment with a 1.5°C state of affairs
• Use a constant method to accessing high-quality and credible knowledge
• Disclose their aviation portfolio emissions depth and/or alignment outcomes yearly for transparency, whereas protecting shopper info confidential

A launch occasion might be held by webinar on April 4, 2024. The Pegasus Pointers can be found free of charge and could be downloaded right here.

Tracey McDermott, Steering Group Chair of the Internet-Zero Banking Alliance and Group Head, Conduct, Monetary Crime and Compliance, Customary Chartered Financial institution mentioned, “The Internet Zero Banking Alliance welcomes the Aviation climate-alignment methodology developed by RMI in collaboration with main financiers. Members of the Alliance have dedicated to setting portfolio decarbonisation targets on this vital sector. This system will help banks in understanding the web zero pathways for the sector and thus help banks as they search to measure and transparently disclose their local weather alignment and set targets on an unbiased and particular person foundation. This may also assist to tell discussions between monetary establishments and their shoppers to help their transition to a internet zero financial system. We look ahead to persevering with our collaboration with RMI within the coming years as we navigate the transition to internet zero.”

Jose Abramovici, International Head of Asset Finance Group of Crédit Agricole CIB mentioned, “After almost two years of labor, now we have designed a framework for lenders to precisely assess and consider the emissions depth of their aviation mortgage guide. This isn’t a theoretical train—that is key to supporting the local weather alignment of the trade.”

Yann Sonnallier, International Head of Aviation Finance at Societe Generale mentioned “Societe Generale is extraordinarily proud to be a founder and preliminary consumer of the Pegasus Pointers, and of all of the collective work performed since 2022 to ascertain this reference methodology and framework, in keeping with NZBA necessities, and at the advantage of all aviation stakeholders.”

Bertrand Dehouck, Head of Transportation Capital Markets at BNP Paribas mentioned “Over the previous two years now we have been targeted on constructing a strong methodology to measure the emissions depth of our aviation enterprise. By figuring out what to measure, how one can measure it and the place to supply the required knowledge, we’re higher geared up to grasp the core levers of decarbonisation and to help the sector’s low-carbon transition.”

Abhishek Pandey, International Head of Transportation Finance of Customary Chartered mentioned, “We’re delighted to have been a part of this vital initiative during the last two years, working alongside main banks and interesting broadly throughout the trade.  The Pegasus Pointers offers NZBA signatories the instruments to navigate the pathways and set targets in direction of the decarbonization of the aviation trade.”

 © 2024 Rocky Mountain Institute. Revealed with permission. Courtesy of RMI.