The International Organization for Standardization (ISO) announced the launch of “ISO 32212, Sustainable finance — Net zero transition planning for financial institutions,” a new standard aimed at enabling banks, insurers, and investors to develop, maintain and integrate climate transition plans into their activities.

According to ISO, the new standard is designed to provide a common framework for transition planning across the financial sector, applying to financial activities ranging from lending and insurance, to asset owner and asset manager investing and capital market activities.

The new document sets out requirements and recommendations for strategic net zero transition planning by financial institutions, to support their response and contribution to the transition to a global net zero, including mobilizing and reallocating capital to enable decarbonization and climate adaptation activities in the real economy, as well as helping institutions in capturing opportunities and minimizing risks.

Key topics covered under the new standard include identifying and assessing institutions’ current positions, including climate-related impacts, dependencies, risks and opportunities, developing and maintaining transition planning objectives and targets into financing decisions and engagement activities, communicating transition planning outcomes, reviewing performance and updating plans, and governance.