In 2022, the Austrian federal ministry responsible for climate action launched the Green Finance Alliance (GFA) as a criteria-based initiative designed to integrate climate objectives into the core business of Austrian financial institutions (i.e., investment and lending portfolios and, for insurers, underwriting portfolio) (GFA, 2024, 2025, 2026a).
GFA members voluntarily but bindingly commit to achieving greenhouse gas (GHG) neutrality no later than 2050, consistent with the European Union’s long-term goal of climate neutrality. To support this objective, the GFA framework (GFA, 2026a) combines a pathway-based approach to the continuous reduction of GHG emissions attributable to portfolios and core business activities with the expansion of green activities through the mobilisation of capital towards climate-positive investments, the management of climate risks and the strengthening of resilience, and the integration of climate considerations into governance, risk management and business processes (“climate governance and mainstreaming”).
This is operationalised through a detailed catalogue of mandatory criteria covering climate strategy, reporting, engagement, fossil fuel phase-out (coal, oil and natural gas), and annual monitoring under a “comply or explain” approach (GFA, 2024, 2026a).
With this end in mind, the GFA allows members to rely either on internationally recognised methodologies such as those of the Science Based Targets initiative (SBTi) or on its own portfolio steering and monitoring system, the Climate Navigation Cockpit (CNC). The CNC is structured around three higher-level steering modules – Portfolio Decarbonisation, Expansion of Green Activities, and Impact Engagement (GFA, 2026a) – and their related key performance indicators (KPIs).
The Portfolio Decarbonisation module is intended primarily to support the decarbonisation of assets and activities in transition, rather than to steer portfolios toward already “green” assets or activities fundamentally incompatible with long-term climate objectives.
That module is built around a purpose-built set of KPIs, the Indicators for Portfolio-related Emission Performance (I-PEPs), which are intended to guide and assess the decarbonisation of investment, lending and insurance-related underwriting portfolios (GFA, 2026b). The other two steering modules within the CNC are primarily based on existing industry approaches.
The present note examines the first I-PEPs methodology standard (Version 1.0, hereafter “the Standard”) with a view to clarifying its conceptual rationale. A separate note will assess its fitness
