The transition plans of financial intermediaries (banks and institutional investors) can represent a powerful tool both for managing climate risks and for steering the economy on a sustainable path. However, we are moving our first steps in this area. In what follows I will discuss two issues and draw some conclusions. 2.
Current vs expected emissions  An intermediary can implement a net zero transition plan in many ways. To simplify, consider two opposite alternatives. The first would entail changing the composition of its portfolio by moving from high to low carbon intensity sectors/firms, identified based on their current emissions.