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RMI, in cooperation with main international banks—BNP Paribas, Citi, Crédit Agricole CIB, Societe Generale, and Normal Chartered—and in session with trade, consultants, 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.
Immediately, 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 economic system will depend on a major ramp up of sustainable aviation fuels (SAF), in addition to additional growth of hydrogen and battery-electric propulsion and fleet modernization. Monetary establishments can play an vital position in supporting a spread of options for the sector via financing the applied sciences, initiatives, and firms that may contribute to a low carbon future.
The aviation sector’s capability to decarbonize relies 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, clients, airports, gas producers, and NGOs. Collaboration with banks, buyers, and policymakers will likely be significantly vital to speed up the manufacturing of SAF—probably the most important lever of decarbonization for the sector.
The Pegasus Pointers have 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-Based mostly 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 growth. The framework is designed to be appropriate with the Web-Zero Banking Alliance’s pointers.
Along with the 5 banks who supported growth of the Pointers, RMI is happy to share that a further two monetary establishments will take up this technique—Caixa Financial institution and CIC—and two are testing implementation of the methodology and assessing future utilization of the Pointers—ING and Export Growth Financial institution of Canada.
Grace Cheung, Normal Supervisor of Sustainability at Cathay Pacific Airways mentioned, “We welcome the financing community’s efforts to standardize the assessment of the climate impact of their aviation portfolios. At Cathay, we believe collaboration is key to a sustainable future and are committed to our ‘Greener Together’ vision. We hope the Pegasus Guidelines will be widely adopted.”
Just like frameworks accomplished for metal (Sustainable Metal Rules), transport (Poseidon Rules), and aluminum (Sustainable Aluminum Finance Framework), the monetary establishments that leverage the Pegasus Pointers will likely 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 information
- Disclose their aviation portfolio emissions depth and/or alignment outcomes yearly for transparency, whereas conserving consumer data confidential
A launch occasion will likely be held by webinar on April 4, 2024. The Pegasus Pointers can be found without spending a dime and may be downloaded here.
Tracey McDermott, Steering Group Chair of the Web-Zero Banking Alliance and Group Head, Conduct, Monetary Crime and Compliance, Normal Chartered Financial institution mentioned, “The Net Zero Banking Alliance welcomes the Aviation climate-alignment methodology developed by RMI in collaboration with leading financiers. Members of the Alliance have committed to setting portfolio decarbonisation targets in this important sector. This methodology will assist banks in understanding the net zero pathways for the sector and thus support banks as they seek to measure and transparently disclose their climate alignment and set targets on an independent and individual basis. This will also help to inform discussions between financial institutions and their clients to support their transition to a net zero economy. We look forward to continuing our collaboration with RMI in the coming years as we navigate the transition to net zero.”
Jose Abramovici, International Head of Asset Finance Group of Crédit Agricole CIB mentioned, “After nearly two years of work, we have designed a framework for lenders to accurately assess and evaluate the emissions intensity of their aviation loan book. This is not a theoretical exercise—this is key to supporting the climate alignment of the industry.”
Yann Sonnallier, International Head of Aviation Finance at Societe Generale mentioned “Societe Generale is extremely proud to be a founder and initial user of the Pegasus Guidelines, and of all the collective work done since 2022 to establish this reference methodology and framework, consistent with NZBA requirements, and at the benefit of all aviation stakeholders.”
Bertrand Dehouck, Head of Transportation Capital Markets at BNP Paribas mentioned “Over the past two years we have been focused on building a robust methodology to measure the emissions intensity of our aviation business. By knowing what to measure, how to measure it and where to source the necessary data, we are better equipped to understand the core levers of decarbonisation and to support the sector’s low-carbon transition.”
Abhishek Pandey, International Head of Transportation Finance of Normal Chartered mentioned, “We are delighted to have been part of this important initiative over the last two years, working alongside leading banks and engaging broadly across the industry. The Pegasus Guidelines gives NZBA signatories the tools to navigate the pathways and set targets towards the decarbonization of the aviation industry.”
© 2024 Rocky Mountain Institute. Printed with permission. Courtesy of RMI.
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