At COP29, the UN-convened Net-Zero Export Credit Agencies Alliance (NZECA) released its first Target-Setting Protocol, designed to assist export credit agencies (ECAs) and export-import (ExIm) banks in formulating and executing net-zero targets to enhance their decarbonisation initiatives.
The Protocol helps NZECA members establish interim and long-term science-based climate targets while meeting their transparency requirements effectively.
It tailors guidance for ECAs and ExIm banks, aligning net zero goals with international trade and economic development.
Eric Usher, the head of the UNEP Finance Initiative said, “ECAs and ExIm banks are essential to climate action, because they have significant influence in global markets and the resources to support large-scale projects worldwide.”
He added, “by financing, insuring, and guaranteeing substantial amounts of international trade and investment, they can direct funds towards sustainable infrastructure, energy, and industrial projects – critical sectors that heavily impact the world’s carbon footprint and that the private sector alone may not be able to help finance.”
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Aligning with Global Climate Goals
Under the Protocol, NZECA members commit to align their portfolio greenhouse gas emissions with a pathway to achieve net-zero by 2050, at the latest, to help meet the global target of limiting temperature increases to 1.5°C above pre-industrial levels by 2100.Â
Members are also expected to set intermediate targets for completion by 2030 or earlier, emphasizing the urgent need for action. They agreed to stop new support for unabated fossil fuels globally, emphasizing their commitment to a low-carbon future.
Also read: COP29: Coal Transition Commission Unveils Recommendations to Accelerate Coal-to-Clean Shift
Expanding the Alliance and Reporting on Progress
Although primarily intended for NZECA members, the Protocol offers a useful structure for ECAs and ExIm banks around the globe. They created a flexible tool that will be updated with the latest best practices and user insights. Members will generate annual reports to monitor progress toward the outlined net-zero objectives.
During COP28 in December 2023, eight export credit agencies founded the NZECA with support from Oxford’s Innovation and Knowledge Hub. Since its inception, the Alliance focuses on consolidating best practices and fostering collaboration for a comprehensive understanding of net-zero ECA.
The Protocol’s release is a key step in turning discussions into action, enabling members to set, share, and achieve goals.
With the launch of the Protocol, NZECA will evaluate its application by their national environments. They aim to coordinate with financial institutions, insurers, investors, exporters, and climate frameworks for a cohesive decarbonisation strategy.