This document specifies a general framework, including principles, requirements and guidance for assessing, measuring, monitoring and reporting on investments and financing activities in relation to climate change and the transition into a low-carbon economy. The assessment includes the following items:

—    the alignment (or lack thereof) of investment and financing decisions taken by the financier with low-carbon transition pathways, adaptation pathways, and climate goals;

—    the impact of actions through the financier’s investment and lending decisions towards the achievement of climate goals in the real economy, i.e. mitigation (greenhouse gas emissions) and adaptation (resilience);

—    the risks to owners of financial assets (e.g. private equities, listed stocks, bonds, loans) arising from climate change.

To support the financier’s assessment of the impact of investment and lending decisions, this document provides guidance for the financier on how to:

—    set targets and determine metrics to be used for tracking progress related to the low-carbon transition pathways of investees;

—    determine low-carbon transition and adaptation trajectories of investees;

—    document the causality or linkage between its climate action and its outputs, outcomes and impacts.

This document is applicable to financiers, i.e. investors and lenders. It guides their reporting activities to the following third parties: shareholders, clients, policymakers, financial supervisory authorities and non-governmental organizations.