Measuring Portfolio Alignment: Technical Considerations
From the Portfolio Alignment Team, a group of experts promoting portfolios’ relative alignment to the objectives of the Paris Agreement. The report offers emerging best practice as it relates to building portfolio alignment tools.
To limit global temperature rise to 1.5 degrees, financial institutions need to follow a pathway to net zero for their own operations and—more importantly—the firms they finance. Portfolio alignment metrics help financial institutions align lending and investments with the pathway to net zero.
The report should be viewed as a first step toward promoting the widespread adoption of more consistent, robust, and decision-useful portfolio alignment approaches that will continue to evolve as the development and use of portfolio alignment tools mature.