Methane abatement is a high-impact, underfinanced climate lever, and financial institutions (FIs) are key to driving related investment. <\/strong>Methane accounts for approximately 29% of historical warming and is over 80 times more potent than CO2 in terms of near term warming impact (ESSD, 2020<\/a>). Despite the existence of cost-effective abatement technologies \u2013 such as pipeline leakage detection and waste-to-energy plants \u2013 finance for these solutions remains far below what is required, particularly within the oil and gas and agrifood sectors. Given financial institutions\u2019 key role in driving capital allocation and corporate engagement, it is imperative that their transition plans fully account for the risks associated with inaction on methane and signal to the market that opportunities to mitigate these emissions exist.<\/p>\n\n\n\n <\/p>\n\n\n\n To assess FI action on methane, CPI undertook a preliminary review of\u00a0the transition plans and climate disclosures of 10 leading banks and institutional investors. We evaluated their action across two dimensions:<\/strong><\/p>\n\n\n To credibly align with net-zero pathways, FIs must not only make high-level commitments, but also set quantifiable, time-bound sector-specific methane targets linked to their financed emissions. Methane considerations should also be embedded into risk management and client engagement processes. With few current leaders, FIs that disclose greater action on methane through their transition plans can demonstrate accountability and reduce their transition risks associated with financing these emissions.<\/p>\n\n\n\n\n
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