Asia-Pacific banks lag Europe on net-zero targets: S&P

Sustainable finance uptake stays flat globally.

Financial institutions are making only gradual progress on cutting portfolio emissions globally, with Asia-Pacific trailing Europe on financed-emissions targets and disclosure, whilst sustainable finance offerings remain stuck at 42%, according to S&P Global.

The report found that 22% of financial institutions had set net-zero targets for Scope 3 financed emissions in 2025, up from 15% in 2023, whilst 21% had intermediate reduction targets. Most firms still lag, with 78% of assessed institutions having no net-zero portfolio target.

Asia-Pacific remained behind Europe and Latin America on financed-emissions target-setting, reflecting uneven regional progress, whilst Europe led on disclosure, fossil-fuel restrictions, and broader decarbonisation measures. S&P said stronger regulation had helped drive Europe’s lead, whereas North America continued to lag on disclosure and target-setting.

Scope 3 financed-emissions reporting is becoming more common globally, but coverage remains patchy.

About 24% of assessed firms currently quantify and report financed emissions, yet amongst the 85 institutions that disclosed such data in the 2025 assessment, 27 said the figures covered half or less of their portfolios.

Coal-financing restrictions are spreading faster than net-zero commitments, with 31% of the 563 banks assessed either restricting coal-related financing or having no exposure in 2025, up from 26% in 2023. S&P said Asia-Pacific institutions were tightening such policies, but Europe remained far ahead.

Sustainable corporate finance remains an untapped opportunity, with only 42% of assessed institutions offering products such as green or sustainability-linked loans, a share little changed since 2023.

S&P said the data showed financial institutions still had significant room to expand transition-related financing even as disclosure and decarbonisation efforts improved only slowly.