The U.S. Treasury Department on Tuesday published guidance for private-sector financial support of net-zero initiatives.

“Principles for Net-Zero Financing & Investment” is a collection of voluntary best practices for financial institutions that promotes consistency and credibility.

Treasury is using the principles to support mobilization of private-sector capital to address the effects of climate change and accelerate the green energy transition.

The agency said government plays a role in accelerating the transition, but the private sector will need to provide increasing amounts of capital and expertise to make it happen.

The nine principles center on Scope 3 greenhouse gas emissions — those indirectly included in a company’s value chain, typically the largest type of emissions for financial institutions.

The first principle reads:

“A financial institution’s net-zero commitment is a declaration of intent to work toward the reduction of greenhouse gas emissions. Treasury recommends that commitments be in line with limiting the increase in the global average temperature to 1.5°C. To be credible, this declaration should be accompanied or followed by the development and execution of a net-zero transition plan.”

The other eight principles drill down on ways to carry out these commitments, from transparency to environmental justice to credible metrics and targets.

Treasury Secretary Janet Yellen expanded on this point later Tuesday in remarks to the Bloomberg Transition Finance Action Forum in New York City.

“There is extensive evidence showing that the changing climate has significant financial impacts,” she said. “Without considering these factors, financial institutions risk being left behind with stranded assets, outdated business models and missed opportunities to invest in the growing clean energy economy.”

Counterpoint

As Treasury published its guidance Tuesday, Climate Impact Partners published a less-rosy picture of progress.

In its fifth annual report on the subject, the carbon reduction market company found that not one of the Fortune Global 500 Companies increased its 2030 climate commitments last year.

Only 3% added 2050 commitments and 34% remain without climate commitments of any kind, the study reported.

There were some bright spots: More than 75% of companies now report emissions, and those that do report emissions earned a bit more in 2022 profits than those that do not.

Operational emissions of companies with a target in 2030 or sooner decreased 7% in 2022, compared with a 3% increase for companies without a target.

“The lack of climate commitments from some of the world’s largest companies is concerning as we get closer to 2030,” Climate Impact Partners CEO Sheri Hickok said in announcing the study. “At this critical juncture, we need companies to lean in, not pull away. The good news is that we have found clear markers for the companies making the most positive impact on emissions today, serving as an example for others to follow.”

The companies tracked are the largest 500 companies in the world — realizing $41 trillion in 2022 revenue, employing more than 70 million people and accounting for more than a third of the world’s gross domestic product.

As such, they hold significant influence on suppliers, customers, other businesses and governments, Climate Impact Partners wrote.

As the organization was preparing its report, 22 attorneys general from Republican states were taking steps that could discourage concerted emissions-reduction efforts as potentially illegal.

Tennessee Attorney General Jonathan Skrmetti sent a letter requesting information from signatories to the Net Zero Financial Providers Alliance emissions reduction commitment.

This may violate state and federal laws including antitrust and consumer protection statutes, Skrmetti wrote on Sept. 13.

Although many signatories are direct competitors, “they nevertheless commit to using their market influence to enforce their collective climate agenda in the broader economy and to ‘[w]ork in coordination’ with other UN-convened ‘Net Zero’ groups. Further, these pressure tactics are backed up by substantial market power,” he wrote.

A disclaimer included in the NZFPA commitment — “The parties making this Commitment do so subject to any legal, regulatory, professional standards and professional or ethical obligations that apply to them” — does not alleviate the concerns of the attorneys general, Skrmetti wrote.

Also signing his letter were the top legal officials of Alabama, Alaska, Arkansas, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, Ohio, Oklahoma, South Carolina, Utah, Virginia, West Virginia and Wyoming.