2DII is supporting the Norwegian Ministry of Finance and the Ministry of Climate and the Environment in a new initiative to help financial institutions measure their alignment with the Paris Agreement objectives. As a key part of the initiative, FIs will use 2DII’s Paris Agreement Capital Transition Assessment (PACTA) tool to gauge their portfolios’ alignment with climate scenarios and determine their exposure to transition risks.
Operationally, 2DII and the Norwegian ministries will hold an initial information session for interested FIs on 23 April, with another session slated for May. Participants will receive an individual report with anonymous peer comparison, while the government will receive a report on the overall alignment of the financial sector and its subsectors. The reports will also include a qualitative analysis of climate actions undertaken by Norwegian financial institutions. Participation is free of charge and individual institutions are guaranteed anonymity.
The initiative is the latest in PACTA Coordinated Projects (PACTA COP), a dedicated program in which 2DII collaborates with governments and supervisors, on an individual or collective basis, to help them apply PACTA to the portfolios of their regulated entities. The initiative comes as a growing number of governments are recognizing the importance of achieving Article 2.1(c) of the Paris Agreement, which calls for making finance flows consistent with climate goals. Additionally, both public and private sector institutions are focusing increasingly on understanding and preparing for the risks associated with climate change and the transition to a low-carbon economy.
Already, 2DII has helped run PACTA COP assessments in Switzerland and Liechtenstein, with additional analyses set to take place in Austria, Luxembourg, the Netherlands, and other countries this year in the run-up to COP26.
Learn more about the initiative (in Norwegian) here.
Learn more about PACTA COP here.