Inside Standard Charteredās Sustainable Transition Plan
Standard Chartered has set interim 2030 targets across 12 high-emitting sectors, aligning with the Paris Agreement's long-term temperature goals.
The finance giant’s Net Zero Transition Plan provides a science-based framework to decarbonise its lending portfolio while continuing to mobilise capital for sustainable growth across key markets.
The bank engaged EY to independently verify that these targets are based on credible third-party scenarios and meet the necessary mathematical rigour.
As the first Global Systemically Important Bank (GSIB) to obtain such external validation, Standard Chartered positions itself at the forefront of science-based emissions reduction in the financial sector.
“We have consciously chosen a science-based approach to our net zero programme to ensure our targets are credible and effective in driving real-world decarbonisation,” says Marisa Drew, Chief Sustainability Officer of Standard Chartered.
The importance of setting sector-specific targets
The Transition Plan highlights Standard Chartered’s sector-specific targets, with emissions reduction commitments ranging from 22% in the cement sector to 85% in coal by 2030.
The bank is maintaining a 1.5°C-aligned trajectory in aluminium and agriculture while targeting a 47-74% reduction in oil and gas emissions intensity.
Acknowledging the challenges posed by emerging markets, where decarbonisation pathways are often less developed, the bank is actively engaging with corporate clients to support their transition strategies.
As of 2024, approximately 55% of the bank’s Transition Priority Clients (TPCs) have yet to set net zero targets.
Standard Chartered plans to intensify engagement efforts, offering ESG advisory services and sustainable finance products to accelerate decarbonisation.
How to scale sustainable finance
A key element of the plan is the mobilisation of US$300bn in sustainable finance by 2030.
As of September 2024, the bank has mobilised US$121bn, with sustainable finance income reaching US$982m for the year.
The plan integrates green bonds, sustainability-linked loans and transition finance products to facilitate decarbonisation efforts across industries.
The bank's Green and Sustainable Product Framework (GSPF) and Transition Finance Framework (TFF) provide governance for these financial solutions, ensuring alignment with industry standards and mitigating the risk of greenwashing.
Through these frameworks, Standard Chartered has developed more than 40 sustainable finance products, targeting high-impact sectors such as renewable energy, electric vehicles and sustainable agriculture.
This work takes place across every corner of the world, too.
āAs a bank that offers access to sustainable growth opportunities across Asia, Africa and the Middle East, Standard Chartered has an important role to play in supporting our clients and markets as they navigate the complexities of transitioning their economies and businesses,ā Marisa explains.
Governance and accountability
The implementation of the Transition Plan falls under the oversight of the Group’s Board, with climate risk and sustainability governance embedded across multiple committees including the Audit Committee, Board Risk Committee and Sustainability Executive Committee.
The Net Zero and Climate Risk Working Forum (NZCRWF) plays a crucial role in assessing client alignment with net zero objectives, ensuring that transition finance strategies remain on track.
The bank has also reinforced its internal capabilities, embedding sustainable finance expertise within its corporate banking teams.
Relationship managers now receive climate risk training, and emissions data is integrated into client engagement strategies to enhance decision-making.
As a bank that offers access to sustainable growth opportunities across Asia, Africa and the Middle East, Standard Chartered has an important role to play in supporting our clients and markets as they navigate the complexities of transitioning their economies and businesses.
The road ahead and the challenges to come
There are certainly challenges ahead, but Standard Chartered’s plan gives the company a strong foothold for the transition to come.
The bank acknowledges that a significant portion of its clients operate in markets with limited net zero commitments, making the transition complex.
To address this, it is prioritising capacity-building efforts and policy engagement to create enabling environments for low-carbon investment.
Additionally, the evolving nature of climate science means that the bank may need to revisit and refine its targets over time.
The plan aligns with Net Zero Banking Alliance guidance, which recommends reviewing targets every three to five years to incorporate the latest scientific developments.
As financial institutions face increasing pressure to turn climate commitments into tangible action, transparency is key.
Standard Chartered’s Transition Plan is certainly a good example of that.
“I’m proud to bring this work to market as we continue to foster the development of sustainable and enduring business models of the future,” Marisa says.
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