In particular, it seems doubtful that net zero pledges can be credibly announced without mentioning what line of action would be taken should environmental and return objectives happen to clash. Net zero pledges by financial intermediaries should more appropriately be viewed as conditional commitments, as they might be incompatible with a sacrifice in terms of return which might exceed some yet unspecified threshold.
To my knowledge, to date few if any intermediaries have been explicit about this potential trade-off. If not addressed, this ambiguity might represent a serious obstacle to the financial system’s contribution to the fight against climate change and to an effective approach to transition risk management.