International Banks Join Hands to Decarbonise Aviation Industry

Published on:
by KnowESG
plane-refueling-3869983 1920

The leading lenders such as Bank of America, BNP Paribas, Citi, Crédit Agricole CIB, Societe Generale and Standard Chartered have collaborated to devise a climate-aligned finance framework to accelerate decarbonisation in the aviation industry.

The banks have come together to form a working group to develop a collective Climate-Aligned Finance (CAF) framework that aims to decarbonise the aviation sector by defining goals for action.

According to the banks, the collaboration will create consistency, ensure transparency in reporting, and help measure progress against climate targets. Through the CAF framework, the banks will know about the emissions of their aviation loan books and work with clients to report emissions, finance low-carbon solutions and encourage investments in new technologies.

The aviation industry alone contributes 2.5 per cent of global C02 emissions, and the air traffic is estimated to surge significantly through 2050. Aviation would use up to 10 per cent of the planet's remaining global carbon budget by 2050. Considering all these aspects, the aviation industry, with the International Air Transport Association, has committed to achieving net-zero emissions by 2050.

Initiatives such as investing in more efficient aircraft, encouraging the development of new aviation technology and accelerating the transition to sustainable aviation fuels (SAF) are already in place as steps to decarbonise the aviation industry. Financial institutions play a significant role in driving toward net-zero transition while funding technologies and projects.

José Abramovici, global head of the asset finance group at Crédit Agricole CIB, said: “We intend to propose a robust and effective framework for all stakeholders in aviation finance, including banks, investors, airlines and lessors. We firmly believe that decarbonisation is key to ensure the long-term future of the aviation industry.”

Experience gained from the Poseidon Principles for maritime shipping and the CAF agreement for steel will facilitate the aviation CAF framework.

Share:
esg
esg
esg
esg

Sustainable Finance Headlines

$35 Million for Singapore's Green Finance Workforce

$35 Million for Singapore's Green Finance Workforce

Trade Finance Goes Green with Finastra, TradeSun

Trade Finance Goes Green with Finastra, TradeSun

SMEs Go Green with North Lanarkshire Grants

Sustainable Finance in ASEAN Expands

Saudi Arabia Unveils Green Finance Framework

Colombia Gets $750M for Climate Shift

Circular Secures $10.5M for Recycled Materials Platform

SocGen Wins Top Sustainability Bank

BEA Grants Wilmar $100M Sustainability Loan

RBC's Push for Client Decarbonisation