August 20, 2020

Next steps from 2° Investing Initiative on target-setting and climate actions


In February 2020, 2° Investing Initiative launched a consultation process to inform our research program on measuring the impact of the financial sector’s climate actions on the real economy. Since then, nearly 60 organizations have sent us written feedback through our formal consultation survey, and many more have reached out bilaterally to share their thoughts. We are incredibly grateful to those who have taken the time to engage with us and are helping us shape the next steps.

Today, we want to share with you the formal results of the consultation process, as well as our workplan in the area of target-setting, impact tracking, and designing impact-oriented climate actions. You can find the results of the survey together with the original slide deck here.

Key takeaways from the consultation process:

  1. A clear consensus that to achieve science-based climate targets, financial institutions need to drive actions that lead to GHG emissions reductions in the real economy, and;
  2. That there is currently insufficient evidence that the alignment of a portfolio’s exposure with climate scenarios can serve as a proxy for measuring progress against related changes caused by the financial institution in the real economy.

Informed by this consultation process, 2° Investing Initiative has initiated a number of steps to address the identified gap and support our stakeholders in building, understanding, and integrating evidence for climate impact into target-setting processes and climate actions. These include:

Action 1: Partnering with leading academic and non-profit organizations on new research initiatives

In July, we signed an MoU with the Rocky Mountain Institute via their new Center for Climate-Aligned Finance, to develop standardized impact measurement frameworks and methodologies to help drive climate alignment in the financial sector. Additionally, we have been working with a range of universities, notably the University of Zurich and the University of Cambridge, to collaborate on research programs measuring the real-world impact of climate actions by financial institutions. We also launched a partnership with the Carbon Tracker Initiative to bring together analytics underpinning climate actions on a joint platform.

Action 2: Convening a working group on “Evidence for Impact” (E4I)

In March 2020, 2DII launched the Evidence for Impact Working Group, in collaboration with 30 leading financial institutions, 10 NGOs and academic institutions, and with funding from the European Commission and the Swiss government, among others. The Working Group is based on two key premises: first, that the impact of financial institutions should be measured according to the change that they bring about in the behaviour of economic actors (households, companies). And second, that a high standard of evidence is needed in order to identify and quantify impact. The Working Group is in the process of co-developing three key deliverables:

  • A Climate Action Guide designed to help financial institutions understand the real-world implications of committing to different climate actions, as well as opportunities to coordinate these actions across existing and potential initiatives (e.g. Principles for Responsible Banking, etc.). The first users of the Climate Action Guide will be the 161 financial institutions participating this year in the Swiss government-convened PACTA climate compatibility test, with planned roll-out to additional stakeholders later this year.
  • A Climate Action Repository, which will allow financial institutions to submit climate actions, to track their implementation, and to evaluate their long-term impact on the real economy.
  • Climate Action Planning Template to systematically record climate actions and contribute to building scientific evidence of their impact on emissions reductions in the real economy. The objective here is to upgrade the state of evidence regarding the real world impact of climate actions, with the ultimate goal of being able to identify causality between a given financial institution’s action and the related changes in the real economy.

Action 3: Continued commitment to IP rights-free research:

Reinforced by this consultation process, we remain committed to providing our research as a public good, open-source and IP rights-free. Our research is also 100% grant- and membership-funded with zero commercial or consulting revenues and no requirement to work with 2° Investing Initiative for users wanting to use our outputs and software.

Notably, we are revamping our code infrastructure in order to ensure it is easily accessible, replicable, and free to use in the future. In September, we plan to release the entire PACTA for Banks codebase so that it can be used completely independently from 2DII, and we plan to undertake similar steps for PACTA for Investors.

Finally, we would like to emphasize that our partners and community are free to use and help contribute to our E4I work, as well as our PACTA methodology and software. We also recognize that of course we are not alone working to improve climate target setting by financial institutions. While 2DII recently withdrew as a Technical Partner to the Science Based Targets Initiative for Financial Institutions (SBTi-FI), it remains our hope that the SBTi consortium or financial institutions looking to set targets through its process will benefit from the PACTA framework. Although we understand that the SBTi consortium has recently removed PACTA as an eligible methodology from the SBTi-FI framework, we expect that as SBTi clarifies its methodological choices as part of its current draft guidance consultation process, this will provide the opportunity to reconcile any outstanding issues.

We look forward to continuing our Evidence for Impact work to shed more light on ways that the financial sector can enact change in the real economy. To learn more or to get involved, please email

About our funders: Co-funded by the European Union’s Horizon 2020 research and innovation programme under grant agreement No 785087.


This website is the new home of 2° Investing Initiative Germany following its relaunch as Theia Finance Labs. If you want to visit 2° Investing Initiative France, please go to