ISO 32212:2026

Sustainable finance — Net zero transition planning for financial institutions

This document specifies requirements and recommendations for strategic transition planning by financial institutions, designed to protect and enhance value by supporting institutions’ response and contribution to a global net zero and climate-resilient economy. The requirements and recommendations are designed to enable financial institutions to develop and maintain transition planning objectives and targets that advance the temperature and resilience goals of the Paris Agreement[23], and establish robust policies and processes to integrate these into their financial activities. This document is applicable to any financial institution, regardless of size, type and geographic location, with a particular focus on banking, insurance and investment institutions. Its provisions are applied in the context of the institution’s particular business model. NOTE 1 Some considerations specific to particular institution types are included in guidance notes. Additional guidance on product attributes specific to different types of financial institution can be found in Annex A. This document is applicable to all financial activities (including lending, insurance, asset owner investing, asset manager investing and capital market activities) that the institution determines it can either control or influence, using a life cycle perspective (e.g. those described in 7.2.2). It can also be applicable to relevant financial activities within real economy institutions and emerging financial institution types, many of which leverage digital technologies and can be subject to different or bespoke regulatory frameworks (e.g. decentralized finance (DeFi) platforms). NOTE 2 This document is intended for global application, recognizing that some financial institutions, including those in some emerging market and developing economies (EMDEs), can face constraints in the local enabling regulatory environment and data availability. It therefore seeks to ensure flexibility and proportionality in application, as appropriate. NOTE 3 Documents on asset management developed by ISO/TC 251, including ISO 55000[18], ISO 55001[19] and detailed guidance in ISO 55002[20], can be useful for financial institution asset management activity, particularly as it relates to alignment of asset management with business objectives (e.g. those related to transition planning).

Finance durable — Planification de la transition vers le zéro émission nette pour les institutions financières

General Information

• Status: Published
• Publication Date: 03-Jun-2026
• ICS: 03.060 - Finances. Banking. Monetary systems. Insurance
• ICS: 13.020.20 - Environmental economics. Sustainability
• Technical Committee: ISO/TC 322 - Sustainable finance
• Drafting Committee: ISO/TC 322 - Sustainable finance
• Current Stage: 6060 - International Standard published
• Start Date: 04-Jun-2026
• Due Date: 22-Jul-2026
• Completion Date: 04-Jun-2026

Overview

ISO 32212:2026 - Sustainable finance - Net zero transition planning for financial institutions is an international standard developed by ISO Technical Committee 322, focusing on sustainable finance. This standard specifies requirements and recommendations for financial institutions to develop strategic net zero transition plans. Its objective is to support the financial sector’s role in enabling a global transition to a net zero and climate-resilient economy, aligning with the temperature and resilience goals of the Paris Agreement.

The document sets out a systematic approach to transition planning, integrating climate mitigation, adaptation, and resilience into financial activities. It is globally applicable to all types of financial institutions-including banks, insurance companies, and investment managers-regardless of size or geographic location. Designed with flexibility and proportionality, it accommodates diverse regulatory environments, including those in emerging markets and developing economies.

Key Topics

• Transition Planning Objectives and Targets
  The standard outlines how financial institutions should create and maintain net zero transition planning objectives and targets, ensuring alignment with international climate goals.
• Integration into Financial Activities
  ISO 32212 guides institutions to embed transition targets within their lending, insurance, investment, and capital market activities-across products, services, and client engagements.
• Governance and Strategic Approaches
  Effective transition planning is framed as a strategic, leadership-driven process, supported by robust governance, regular performance reviews, and risk identification.
• Adaptation and Climate Resilience
  The standard emphasizes not only decarbonization but also the need for adaptation and resilience, considering social, nature-related, and economic co-benefits and trade-offs.
• Stakeholder Engagement and Communication
  Provisions encourage transparent engagement with clients, investees, regulators, and stakeholders, as well as clear disclosure of transition planning outcomes both internally and externally.
• Continuous Improvement and Review
  Institutions are required to iteratively review and update their transition plans, supported by ongoing data collection, internal audits, and documentation control.

Applications

ISO 32212:2026 is applicable to a broad range of financial activities and institution types, including:

• Banking and Lending: Guidance on integrating net zero objectives into loan underwriting, risk assessment, and lending portfolios.
• Insurance: Recommendations for embedding climate risk and resilience into insurance product development and underwriting practices.
• Asset Management and Investment: Framework for incorporating net zero transition planning into asset allocation, stewardship, and engagement with investee companies.
• Capital Markets and Emerging Finance: The standard is also relevant for decentralized finance (DeFi) and other innovative platforms, enabling bespoke integration within diverse regulatory contexts.
• Global and Emerging Market Relevance: ISO 32212’s flexible design supports application in developed and developing economies, addressing differences in regulatory capacity and data availability.

By following ISO 32212, financial institutions can better manage climate risk, seize opportunities from the net zero transition, and help mobilize capital toward climate mitigation and adaptation, ultimately supporting financial system stability and long-term value creation.

Related Standards

ISO 32212:2026 complements and aligns with a comprehensive suite of standards and frameworks in sustainable finance and climate-related disclosure, including:

• ISO 14060 – Greenhouse gas management and related activities
• ISO 14064 – Greenhouse gases: Specification with guidance at the organization level
• ISO 55000/55001/55002 – Asset management standards, relevant for aligning asset management with climate transition objectives
• ISO 37000 – Guidance on organizational governance
• ISO 14001, ISO 14068, ISO 14097 – Environmental and climate risk management standards
• International initiatives: Science Based Targets Initiative (SBTi), Partnership for Carbon Accounting Financials (PCAF), Glasgow Financial Alliance for Net Zero (GFANZ), and International Sustainability Standards Board (ISSB) guidance.

Adopting ISO 32212 enables financial institutions to demonstrate credible climate action, improve compliance with global expectations, and lead in sustainable finance practices. This standard is a foundational tool for any institution aiming to future-proof its business model in the evolving landscape of sustainable finance and net zero transition planning.

Standards Content (Sample)

International
Standard
ISO 32212
First edition
Sustainable finance — Net zero
2026-06
transition planning for financial
institutions
Finance durable — Planification de la transition vers le zéro
émission nette pour les institutions financières
Reference number
© ISO 2026
All rights reserved. Unless otherwise specified, or required in the context of its implementation, no part of this publication may
be reproduced or utilized otherwise in any form or by any means, electronic or mechanical, including photocopying, or posting on
the internet or an intranet, without prior written permission. Permission can be requested from either ISO at the address below
or ISO’s member body in the country of the requester.
ISO copyright office
CP 401 • Ch. de Blandonnet 8
CH-1214 Vernier, Geneva
Phone: [phone]
Email: [e-mail]
Website: www.iso.org
Published in Switzerland
ii
Contents Page
Foreword .v
Introduction .vi
1 Scope . 1
2 Normative references . 1
3 Terms and definitions . 1
3.1 Terms related to transition .2
3.2 Terms related to systems .7
4 Key activities for financial institutions . 9
5 Identify and assess the current position .10
5.1 General .10
5.2 Institution’s current position .10
5.2.1 General .10
5.2.2 Current strategy and profile of financial activities .11
5.2.3 Emissions inventory .11
5.3 Climate-related impacts, dependencies, risks and opportunities . 12
5.3.1 General . 12
5.3.2 Use of scenario analysis . 13
5.3.3 Approach to scenario analysis . 13
6 Develop and maintain transition planning objectives and targets .15
6.1 General . 15
6.2 Transition levers and pathways . 15
6.2.1 General . 15
6.2.2 Transition levers .16
6.2.3 Use of benchmark pathways or other guidance .16
6.3 Transition planning objectives and targets .17
6.3.1 General .17
6.3.2 Transition planning objectives for financial activities .17
6.3.3 Transition planning targets for financial activities .18
6.3.4 Considerations for transition plan targets .19
6.3.5 Combined contribution of transition planning objectives and targets . 20
6.3.6 Use of carbon credits .21
7 Integrate transition planning objectives and targets into financing decisions and
engagement activity .22
7.1 General . 22
7.2 Implementation strategy . 23
7.2.1 General . 23
7.2.2 Integration into financing decisions . 23
7.2.3 Integration into products and services design .24
7.3 Engagement strategy . 25
7.3.1 General . 25
7.3.2 Engagement with industry actors, policymakers and other public interest
stakeholders . 26
7.3.3 Engagement with clients and investees . 26
8 Communicate transition planning outcomes .27
8.1 General .27
8.2 Internal communication .27
8.3 External communication .27
9 Review performance and update plans .28
9.1 General . 28
9.2 Internal audit programme . 29
9.3 Nonconformity and corrective action . 29

iii
9.4 Management review . 29
9.5 Data collection and quality . 30
10 Governance .31
10.1 General .31
10.2 Leadership and commitment .31
10.3 Skills and culture.32
11 Documentation .32
11.1 Documentation requirements .32
11.2 Creating and updating documentation .32
11.3 Control of documentation . 33
Annex A (informative) Further guidance .34
Bibliography .38

iv
Foreword
ISO (the International Organization for Standardization) is a worldwide federation of national standards
bodies (ISO member bodies). The work of preparing International Standards is normally carried out through
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The procedures used to develop this document and those intended for its further maintenance are described
in the ISO/IEC Directives, Part 1. In particular, the different approval criteria needed for the different types
of ISO document should be noted. This document was drafted in accordance with the editorial rules of the
ISO/IEC Directives, Part 2 (see www.iso.org/directives).
ISO draws attention to the possibility that the implementation of this document may involve the use of (a)
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This document was prepared by Technical Committee ISO/TC 322, Sustainable finance.
Any feedback or questions on this document should be directed to the user’s national standards body. A
complete listing of these bodies can be found at www.iso.org/members.html.

v
Introduction
0.1  General
[23]
Article 2.1(a) of the Paris Agreement sets the ambition of holding the increase in the global average
temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature
increase to 1,5 °C, recognizing that this would significantly reduce the risks and impacts of climate change.
Article 2.1(b) sets this ambition alongside the objective to increase the ability to adapt to the adverse effects
of climate change and foster climate resilience and low greenhouse gas (GHG) emissions development.
[23]
The Paris Agreement states it will be implemented in accordance with the principles of equity, common
but differentiated responsibilities, and respective capabilities in different parts of the world (see Article
2.2), and in the context of sustainable development and the goal of eradicating poverty. To deliver on
[23]
the objectives of the Paris Agreement , each Party undertakes to prepare, communicate and maintain
nationally determined contributions (NDCs) (see Article 4) and to engage in adaptation planning processes
(see Article 7).
[23]
Specifically related to finance, Article 2.1(c) of the Paris Agreement states that finance flows must
be consistent with a pathway towards low GHG emissions and climate-resilient development. Article 9
[107]
elaborates on the role of climate finance. The Glasgow Climate Pact reaffirmed the goals of the Paris
[23]
Agreement . It highlighted that every increment of global warming beyond 1,5 °C intensifies the risks and
impacts associated with climate change. It also emphasized that limiting global warming to 1,5 °C requires
reducing global carbon dioxide (CO ) emissions by 45 % by 2030 relative to the 2010 level and to net zero
around mid-century, as well as deep reductions in other GHGs. In addition, it underlined the critical role of
scaling up private finance in achieving global climate goals.
0.2  Objective of this document
This document specifies requirements and recommendations for strategic net zero transition planning
by financial institutions, designed to protect and enhance value by supporting institutions’ response and
contribution to the transition to a global net zero and climate-resilient economy. The requirements and
recommendations are designed to enable financial institutions to develop and maintain transition planning
[23]
objectives and targets that advance the temperature and resilience goals of the Paris Agreement , and
establish robust policies and processes to integrate these into their financial activities. The document
builds on existing guidance, including materials developed by international organizations, jurisdictional
authorities, industry initiatives and others.
This document aims to support financial institutions in responding to and contributing towards the
transition to a global net zero and climate-resilient economy in a systematic and iterative manner, pursuing
continual improvement in their transition planning. This includes mobilizing and reallocating capital to
enable both decarbonization and climate adaptation activities in the real economy. It also aims to support
economic growth and competitiveness and a resilient financial system by enabling financial institutions to
capture opportunities for themselves (and their shareholders) and for their clients and beneficiaries in the
real economy, while minimizing current and future risks.
This document recognizes that there are limits to the influence financial institutions can have over the real
economy climate mitigation and adaptation outcomes resulting from the implementation of their transition
plans. Outcomes can be impacted by a range of external dependencies, including dependencies related to
public policy, regulation, scientific and climatic developments, and the actions of clients and investees.
0.3  Interaction with other standards
This document does not consider financial institutions’ operational emissions, nor does it provide detailed
[6]
guidance on the credibility of net zero commitments. In this regard it is designed to complement ISO 14060 ,
as well as other relevant third-party resources (e.g. the Financial Institutions Net Zero Standard developed
[111]
by the Science Based Targets Initiative (SBTi) ). ISO 14060 will provide a comprehensive framework for
organizations to credibly set out their ambitions, transition planning and progress towards net zero GHG
emissions, in their own operations and their value chains. A financial institution that aims to achieve net
zero GHG emissions in both its operations and its financial activities may therefore choose to apply the
requirements and recommendations in this document alongside those in ISO 14060.

vi
This document utilizes a hybrid approach to identifying GHG categories, drawing on both existing ISO and
Greenhouse Gas Protocol GHG Protocol (GHG Protocol) standards, reflecting the more accurate alignment of
[160]
the GHG Protocol with the scope of this document and the ISO and GHG Protocol partnership, which will
combine their respective GHG standards into harmonized co-branded international standards.
0.4  Foundations of this document
0.4.1  Role of net zero transition planning by financial institutions and the theory of change
With connections to actors in all sectors of the real economy, financial institutions have an important role
[23]
to play in advancing the goals of the Paris Agreement . By engaging in transition planning, developing
and maintaining transition planning objectives and targets, and establishing robust policies and processes
to integrate these into their financial activities, financial institutions can play a critical enabling role in
supporting their clients and investees to manage risk and capture opportunities associated with the global
[23]
transition to a net zero and climate-resilient economy.
Informed by forward-looking assessment of climate-related risks and opportunities, a financial institution
can integrate transition planning objectives and targets into its strategy. It can set policies for its lending,
investment or insurance activities, as well as its engagement activities with clients and investees, informed
by analysis of their climate mitigation and climate adaptation strategies.
NOTE 1 In its report on the need for scaling climate finance, the UN-convened Independent Expert Group on Climate
[26]
Finance states that “Every financial decision should take climate risk into account”.
This document is therefore grounded in a theory of change which recognizes that robust, credible processes
for net zero transition planning, undertaken as a strategic exercise as part of wider business planning, can
help an institution protect and enhance its own long-term value and that of its clients and beneficiaries,
[23]
while scaling the provision of finance to advance the goals of the Paris Agreement . This can include
providing finance to help developing countries both mitigate and adapt to climate change (see Article 9.1). At
the same time, an institution’s financing strategy can minimize adverse impacts and capture opportunities
for stakeholders, society, communities, the economy and the natural environment.
In developing a strategic approach to net zero transition planning, it is important to recognize the need for
financial institutions to consider not only the reduction of financed, facilitated and insurance associated
emissions, but also their contribution to the decarbonization and adaptation efforts of their clients and
investees in the real economy (e.g. by financing the abatement of emissions in high-emitting sectors or by
financing climate mitigation and adaptation solutions). This document’s focus on forward-looking strategies,
policies and processes that support real economy transition pathways is aligned with the United Nations
[24]
Environment Programme (UNEP) Theory of Change for Climate Mitigation .
[100]
NOTE 2 The Net Zero Investment Framework (NZIF) identifies the importance within net zero strategies
of maximizing efforts to “finance reduced emissions” rather than focusing solely on efforts to “reduce financed
emissions”.
NOTE 3 Other guidance and disclosure frameworks for transition planning and transition plans recognize the role
of the private sector in both responding to, and contributing towards, the transition to a net zero and climate-resilient
[30] [41]
economy (GFANZ (2022) and TPT (2023) .
This document recognizes that climate-related risks can be viewed as both exogenous and endogenous to
the financial system. That is, financial institutions are exposed to proximate climate-related financial risks,
which are already influencing asset values today and will continue to crystallize within traditional time
horizons, and also contribute to future system-wide risks, such as those that could arise from a disorderly
transition or extreme warming scenarios that exacerbate physical climate risks, the precise timing and
magnitude of which can be uncertain. Effective transition planning within financial institutions can
therefore be expected to support greater resilience at both institution and system levels, while also capturing
commercial opportunities associated with mobilizing the USD 8,6 trillion in capital needed annually until
[23]
2050 to advance the goals of the Paris Agreement (based on estimates by the Climate Policy Initiative,
[112]
CPI ).
Of course, it is also important to acknowledge that the finance sector has an enabling, as opposed to
controlling, role in the transition. The principal decarbonization and adaptation efforts will take place
under the control of real economy actors, subject to supportive policy environments. Identification of the

vii
interconnections and external dependencies that can impact the effectiveness of a financial institution’s
transition plan represents an important ongoing element of the transition planning process.
NOTE 4 Supervisory statements recognize the distinctive characteristics of climate risk, the need for a strategic
[113]
approach and the role of financial institutions in stewarding the transition (Financial Stability Board ).
NOTE 5 The results of climate stress testing exercises, undertaken within the central banking community, have
[114]
evidenced the benefits of an early and orderly transition (European Central Bank (ECB) ).
0.4.2  Accommodating national circumstances
[23]
The Paris Agreement explicitly acknowledges the need to accommodate national circumstances in
the pursuit of its goals. Article 2.2 states that its implementation must reflect equity and the principle of
common but differentiated responsibilities and respective capabilities in the light of different national
circumstances. Article 13.2 explicitly allows for flexibility for developing countries, complementing
Article 9.1 which highlights the need for finance flows from developed to developing countries in supporting
a global transition.
NDCs and national adaptation plans reflect this approach, describing climate plans that outline a country’s
mitigation, adaptation, finance and technology needs, and impacts from response measures, thereby acting
[23]
as the foundation for implementing the Paris Agreement . NDCs, national adaptation plans, national
transition plans, industrial policies or strategies, and national sector and/or technology plans and pathways
can accordingly provide locally relevant reference points for financial institutions in their transition
planning activities.
[99]
The Enhanced Transparency Framework (ETF) builds on existing reporting and review processes
[23]
established in the Paris Agreement , specifically addressing ongoing concerns around credibility and
flexibility in a way that is respectful of national sovereignty.
The G20 also acknowledges the challenge for organizational transition planning in balancing credibility
and consistency with the need to remain flexible as organizations align their own planning with
[90]
jurisdiction-specific circumstances. Such proportionality is essential for global applicability. Where
jurisdiction emissions reduction pathways do not exist or are incomplete, financial institutions can apply
international sector guidance, global standards or targets. These can incorporate exemptions, flexibilities
[94]
or proportionality approaches. This can mean, for example, differing transition priorities with a greater
[47]
focus on adaptation activity and operational emissions in some jurisdictions.
0.4.3  Looking beyond decarbonization
[23]
The Paris Agreement considers issues beyond decarbonization. For example, it recognizes that
adaptation is a key component of, and makes a contribution to, the long-term global response to climate
change to protect people, livelihoods and ecosystems including country specific flexibility (see Article 7).
The preamble acknowledges both the need for a just transition taking into account “…the workforce and the
creation of decent work and quality jobs in accordance with nationally defined development priorities” as
well as nature-related implications, noting “the importance of ensuring the integrity of all ecosystems,
including oceans, and the protection of biodiversity.”.
This document therefore addresses the need to look beyond decarbonization, taking into account adaptation
activity as well as potential co-benefits and trade-offs with societal and nature-related impacts and
[23]
dependencies. For example, Article 5 of the Paris Agreement emphasizes the need to conserve and
enhance forests as carbon sinks, encouraging action to reduce deforestation. This document accordingly
provides a strategic framework for supporting the financial sector to respond to and contribute towards the
[27]
global transition, while considering nature, adaptation and a just transition.
Also, recognizing the interconnected nature of climate, nature and human systems, it is important to identify
and mitigate unintended impacts of potential decarbonization actions (e.g. the potential trade-offs between
[28]
climate action, energy access and affordability, and economic development). This aligns with the Paris

viii
[23]
Agreement requirement (see Article 4.1) that climate action is undertaken “on the basis of equity, and in
the context of sustainable development and efforts to eradicate poverty”.
[115]
NOTE 1 The OECD Guidelines for Multinational Enterprises on Responsible Business Conduct set
recommendations to “enhance the business contribution to sustainable development and address adverse impacts
associated with business activities on people, planet, and society.”
NOTE 2 Network for Greening the Financial System (NGFS) in its guidance on integrating adaptation and resilience
[116]
into transition plans indicates that “[w]hile mitigation remains indispensable to limit future damages, integrating
adaptation into climate transition plans is also crucial, given their interconnectedness. Adaptation efforts help reduce
vulnerability, strengthen resilience, and unlock economic opportunities”.
[121]
NOTE 3 A CFRF report describes an approach to adaptation-related decision-making for financial institutions
utilizing a range of future warming scenarios (ABC Framework).
[122]
NOTE 4 TNFD identifies integrated transition planning activities as providing a “coherent structure” for
managing both nature-related dependencies, impacts, risks and opportunities, and climate mitigation and adaptation
efforts, thereby contributing to the transition envisaged by both the Kunming-Montreal Global Biodiversity
[23]
Framework and the Paris Agreement .
NOTE 5 Artificial intelligence (AI) and other technology can help identify and quantify the interconnected nature
of climate, nature and human systems.
NOTE 6 Decarbonization in the context of this document extends beyond consideration of carbon dioxide to
consider all GHGs.
0.4.4  Building on existing guidance and expectations
The requirements for credible transition planning as described in this document are designed to be
compatible with, and build on, existing guidance and expectations relevant to transition planning by
financial institutions. This includes:
— the iterative development and practical experience reflected in international finance sector initiatives,
such as the Glasgow Financial Alliance for Net Zero (GFANZ) and the Institutional Investors Group on
Climate Change (IIGCC);
— jurisdictional and international work on public disclosure of transition plans, such as the International
Sustainability Standards Board (ISSB) guidance on disclosing information about an entity’s transition
[123]
plan;
— non-governmental organization (NGO) initiatives on matters such as target setting, emissions
measurement and transition plan assessment, including SBTi, the Partnership for Carbon Accounting
Financials (PCAF) and The TPI Global Climate Transition Centre (TPI Centre);
— finance sector supervisory expectations around transition planning and the management of climate-
related financial risk, including the work of the NGFS.
[22]
The document also draws on (and references where appropriate) ISO documents including IWA 42 ,
[15] [16]
ISO 32210 and ISO/TS 32211 . A number of documents on environmental management developed by
[1] [2] [3] [11]
ISO/TC 207 are also relevant, including ISO 14001 , the ISO 14019 series , ISO 14030-1 , ISO 14100 ,
[5] [7] [8] [10] [19]
ISO 14054 , ISO 14064-1 , ISO 14068-1 and ISO 14097 . ISO 55001 on asset management and
[17] [2]
ISO 37000 on governance are also relevant. The ISO 14019 series provides guidance on the validation
and verification of sustainability information. Furthermore, this document is designed to complement
ISO 14060, as described in 0.3.

ix
International Standard ISO 32212:2026(en)
Sustainable finance — Net zero transition planning for
financial institutions
1 Scope
This document specifies requirements and recommendations for strategic transition planning by financial
institutions, designed to protect and enhance value by supporting institutions’ response and contribution
to a global net zero and climate-resilient economy. The requirements and recommendations are designed
to enable financial institutions to develop and maintain transition planning objectives and targets that
[23]
advance the temperature and resilience goals of the Paris Agreement , and establish robust policies and
processes to integrate these into their financial activities.
This document is applicable to any financial institution, regardless of size, type and geographic location,
with a particular focus on banking, insurance and investment institutions. Its provisions are applied in the
context of the institution’s particular business model.
NOTE 1 Some considerations specific to particular institution types are included in guidance notes. Additional
guidance on product attributes specific to different types of financial institution can be found in Annex A.
This document is applicable to all financial activities (including lending, insurance, asset owner investing,
asset manager investing and capital market activities) that the institution determines it can either control
or influence, using a life cycle perspective (e.g. those described in 7.2.2). It can also be applicable to relevant
financial activities within real economy institutions and emerging financial institution types, many of
which leverage digital technologies and can be subject to different or bespoke regulatory frameworks (e.g.
decentralized finance (DeFi) platforms).
NOTE 2 This document is intended for global application, recognizing that some financial institutions, including
those in some emerging market and developing economies (EMDEs), can face constraints in the local enabling
regulatory environment and data availability. It therefore seeks to ensure flexibility and proportionality in application,
as appropriate.
[18] [19]
NOTE 3 Documents on asset management developed by ISO/TC 251, including ISO 55000 , ISO 55001 and
[20]
detailed guidance in ISO 55002 , can be useful for financial institution asset management activity, particularly as it
relates to alignment of asset management with business objectives (e.g. those related to transition planning).
2 Normative references
There are no normative references in this document.
3 Terms and definitions
For the purposes of this document, the following terms and definitions apply.
ISO and IEC maintain terminology databases for use in standardization at the following addresses:
— ISO Online browsing platform: available at https:// www .iso .org/ obp
— IEC Electropedia: available at https:// www .electropedia .org/

3.1 Terms related to transition
3.1.1
transition plan
output of transition planning (3.1.2), often a published disclosure, which details how the entity plans to
achieve its stated goals
Note 1 to entry: Established frameworks for disclosing transition plans include formalized pillars such as metrics and
targets, engagement strategy, and governance processes.
[124]
[SOURCE: PRI (2026) ]
3.1.2
transition planning
dynamic, iterative process through which an entity develops an organization-wide approach to the broader
economic transition to net zero (3.1.9), including by defining how they will adapt or transform operations,
strategies, and business models to align with their stated goals, and integrating these goals across the
organization
Note 1 to entry: NGFS (2024) state that transition planning (and transition plans) capture climate mitigation and
[125]
adaptation.
Note 2 to entry: As noted in the Introduction and set out in the Scope (see Clause 1), the focus of this document is
the application of transition planning in the context of financial institutions’ (3.2.8) financial activities (3.2.9). This
focus acknowledges that the overwhelming majority of financial institutions’ greenhouse gas emissions (3.1.15) are
associated with their financial activities, and recognizes the critical enabling role that financial institutions can
play in supporting their clients and investees to manage risk and capture opportunities associated with the global
transition to a net zero and climate-resilient economy. A financial institution that aims to achieve net zero greenhouse
gas emissions in both its operations and its financial activities may therefore choose to apply the requirements and
recommendations in this document alongside those in ISO 14060.
[124]
[SOURCE: PRI (2026) , modified — Notes 1 and 2 to entry added.]
3.1.3
transition finance
lending, financing, investment, insurance, and related products and services that are critical to delivering
real economy (3.1.5) emissions reduction to support an orderly, real economy transition to net zero (3.1.9)
Note 1 to entry: GFANZ identifies four key transition financing strategies, each of which aims to generate positive real
economy impacts:
a) climate solutions (3.1.7): entities and activities that develop and scale climate solutions;
b) aligned: entities that are already aligned to a 1,5 °C pathway;
c) aligning: entities committed to transitioning in line with 1,5 °C-aligned pathways;
d) managed phaseout: the accelerated managed phaseout of high-emitting physical assets.
Note 2 to entry: For the purposes of this document, a broad definition of transition finance has been adopted.
[30]
[SOURCE: GFANZ, 2022 , modified]
3.1.4
adaptation finance
lending, financing, investment, insurance and related products and services that are critical to delivering
real economy (3.1.5) adjustments in ecological, social or economic systems in response to actual or expected
climate change and its effects
[126]
[SOURCE: UNFCCC , modified]
3.1.5
real economy
economic activity that concerns the production, purchase and flow of goods and services outside of the
financial sector
Note 1 to entry: Financial institutions (3.2.8) are significant intermediaries that support activity in the real economy
(production and consumption by households, businesses and government) through their lending, investing,
underwriting, and advising activities.
[30]
[SOURCE: GFANZ, 2022 , modified]
3.1.6
climate change adaptation
process of adjustment to actual or expected climate change and its effects
Note 1 to entry: In human systems, adaptation seeks to moderate or avoid harm or exploit beneficial opportunities.
Note 2 to entry: In some natural systems, human intervention can facilitate adjustment to expected climate and its
effects.
[21]1)
[SOURCE: ISO Guide 84:— , 3.1.3, modified — “climate change” replaced “climate” in the definition.]
3.1.7
climate solution
technologies, services, tools, or social and behavioural changes that directly eliminate, remove, or reduce
real economy (3.1.5) greenhouse gas emissions (3.1.15) or that directly support adaptation to the impacts of
climate change
Note 1 to entry: Climate solutions have two attributes:
— they represent a significant contribution to real economy emissions reduction and removal or climate resilience;
— the solution’s own emissions are reasonably expected to progress toward net-zero over time.
Note 2 to entry: Nature-based solutions are a category of climate solution. Such solutions represent actions to protect,
sustainably manage, and restore natural and modified ecosystems in ways that address societal challenges effectively
and adaptively, to provide both human well-being and biodiversity benefits.
[108]
[SOURCE: GFANZ, 2023 , modified]
3.1.8
climate enabler
technologies, services, tools, or social and behavioural changes that indirectly contribute to, but are critical
for, real economy (3.1.5) greenhouse gas emission (3.1.15) reductions by facilitating the deployment and
scaling of climate solutions (3.1.7)
[108]
[SOURCE: GFANZ, 2023 , modified]
3.1.9
net zero
net zero greenhouse gases
condition in which human-caused residual emissions (3.1.20) are balanced by human-led removals over a
specified period and within specified boundaries
Note 1 to entry: Human-led removals include ecosystem restoration, direct air carbon capture and storage,
reforestation and afforestation, biochar and other effective methods.
Note 2 to entry: The words “human-caused” and “human-led” are intended to be understood as synonymous with the
word “anthropogenic” in IPCC definitions.
[22]
[SOURCE: IWA 42:2022 , 3.1.1]
1) Under preparation. Stage at the time of publication: ISO/DGuide 84.2:2025.

3.1.10
carbon credit
tradeable intangible instrument issued by a GHG/carbon-crediting programme, representing a greenhouse
gas emission (3.1.15) reduction to, or removal from, the atmosphere equivalent to one metric tonne of carbon
dioxide equivalent
Note 1 to entry: Carbon credits can be retired without being used for offsetting, as a contribution to global climate
action or global net zero (3.1.9). Credits and offsets are not interchangeable terms.
Note 2 to entry: Carbon credits can be of different types: avoidance/reduction credits or removal credits.
Note 3 to entry: Carbon credit projects are validated and their impacts verified by carbon-crediting programmes.
Carbon credits are uniquely serialized, issued, tracked and retired or administratively cancelled by means of an
electronic registry operated by an administrative body, such as a carbon-crediting programme.
3.1.11
carbon lock-in
estimates of future greenhouse gas emissions (3.1.15) that are likely to be caused by an undertaking’s key
assets or products sold within their operating lifetime
[38]
[SOURCE: EFRAG, 2022 , Table 2, modified — “carbon lock-in” replaced “locked-in GHG emissions” as the
term.]
3.1.12
facilitated emission
indirect greenhouse gas emission (3.1.15) arising as a consequence of capital market transactions, i.e. those
associated with services provided by financial institutions (3.2.8) to support the issuance of capital market
instruments
[51]
[SOURCE: PCAF, 2023 , modified]
3.1.13
financed emission
indirect greenhouse gas emission (3.1.15) arising as a consequence of the financing activities, such as lending
and inves
...