FAQ  Questions and answers about the Green Finance Alliance

The GFA is an initiative of the Ministry for Climate Action (BMK). Its goal is to establish a broad alliance for climate protection in the Austrian financial industry. Target attainment is monitored once a year based on the criteria catalogue. An aggregated report is published annually to communicate the members’ overall progress: Annual Report.

The members of the GFA are eleven ambitious companies from the Austrian financial sector. They have voluntarily committed to transition their core business towards climate neutrality and aligning their business activities with the 1.5 degree target set by the Paris Agreement. They act as climate protection pioneers and show that climate protection and environmentally sustainable business practices are compatible. More here: GFA publications.

A fit for the future financial system requires new perspectives and models that account for climate related aspects. Climate targets and concrete measures must be integrated into existing as well as new processes. To this end, the GFA has defined five target dimensions for the core business of its members:

• Aligning portfolios with the 1.5 degree target of the Paris Agreement
• Creating greenhouse gas-neutral portfolios by 2050: Continuously reducing GHG emissions attributable to portfolio positions
• Expanding green activities in the core business, with the aim of encouraging a positive impact and mobilising capital to fund climate targets
• Managing climate risk and encouraging resilience in the face of future climate and climate-induced change
• Promoting climate governance and mainstreaming in all relevant areas of business
• Together with other peers, the initiative’s members contribute to re-direct capital flows towards a sustainable, low-carbon future.

A Membership in the GFA enables your financial company to lead the way. The GFA is a flagship initiative for climate-responsible action for the industry and makes its members pioneers in the field of green finance. The members of the GFA receive support on their path to climate neutrality from the Ministry of Climate Action, the Environment Agency Austria and other experts.

The criteria catalogue contains measures relating directly to the companies’ core business. The focus is on alignment with the 1.5 degree target and thus the continuous reduction of greenhouse gas emissions (phase-out of coal, petroleum, and natural gas).

The criteria are science-based and mandatory for the financial companies’ lending, investment, and insurance business. Compliance with the criteria is reviewed in an annual monitoring process. The criteria focus on requirements for the phase-out of fossil fuels, the expansion of green business activities, and transparent annual climate reporting.

Other criteria relate to operational ecology, i.e. the climate-friendly conduct of the companies themselves. Key topics in this regard include a travel policy, procurement practices, the use of electricity generated by renewable energy sources, and the introduction of an operational environmental management system (EMAS).

The alignment of the portfolio with the 1.5 degree target as defined by the Paris Agreement must be achieved by 2040 at the latest. This is also necessary for achieving the climate target of the EU – climate neutrality by 2050.

This measure requires the analysable portfolio to be aligned with the 1.5 degree target of the Paris Agreement. This target can only be successfully achieved if companies and projects that are provided with financing, insurance, or investments reduce their own greenhouse gas emissions in line with a pathway that is compatible with the 1.5 degree target.

The financial companies in the initiative can facilitate the process with targeted engagement activities. This includes communicating climate-related strategic expectations to their clients, work with them to elaborate transformational opportunities and accompany them on their transition path. Another measure is divestment, which refers to the phase-out of financing for environmentally harmful activities. However, it is very clear that companies from the fossil fuel sector that take climate protection seriously and adapt their business models accordingly should continue to have access to capital and receive guidance from financial companies.

The GFA stipulates the use of certain methods and standards  for measuring the alignment with the 1.5 degree target. Please refer to the Executive Summary for further information.

Challenges differ significantly from company to company: For some, it is difficult to phase-out fossil fuels, while for others it may be challenging to comply with the required disclosures or the implementation of an Eco-Management and Audit Scheme (EMAS).

The biggest benefit for members is making a real contribution to climate protection as well as securing a liveable future for our children. Members have the opportunity to position themselves as credible, green pioneers in the eyes of their customers and society. At the same time, the membership provides support and guidance along the way regarding necessary steps for the transformation.

This will most likely be the case in the long term. But the effects of the climate crisis show that there is no time to wait for this development to happen by itself.
On the one hand, the aim for the financial sector is to support the transformation towards a sustainable society. On the other hand, the pace of the transformation towards climate neutrality in 2050 must accelerate significantly. Together with ambitious financial companies, the GFA is positioning itself as a pioneer and a role model on this path.

Financial companies that are just starting to develop their climate strategy can become members and are welcome to join the initiative. The information and dialogue opportunities associated with the membership could be especially helpful for such companies.

The GFA is aimed at both, established peers and those who want to take on a pioneering role. In both cases, it is important that the financial companies commit to meet the criteria. The company must provide the necessary financial and personnel resources.

Many EU regulations that will be mandatory for certain groups of financial institutions in the future (e.g. the reporting obligations pursuant to the CSRD, EU Taxonomy, and SFDR), focus especially on detailed disclosure obligations.

The criteria of the GFA, however, define mandatory requirements with regard to the transition towards the alignment of portfolios to the 1.5 degree target defined by the Paris Agreement, climate neutrality, and the phase-out of fossil fuels. The reporting criteria in the GFA serve the purpose of disclosing these efforts.

As part of the support, workshops, webinars, training and bilateral discussions are organised for members to provide technical and scientific information for the implementation of the criteria. Some events are organised in cooperation with our advisory council members, who will share important knowledge about science-based methods, current developments, and other important topics in their role as national and international green finance experts.

Yes. The list of criteria for the GFA pertains to the entire participating company, and thus also to all domestic and foreign subsidiaries to which the list of criteria can be applied.