| The six biggest Wall Street banks have now promised to get to net-zero emissions, after Citigroup Inc., Goldman Sachs Group Inc. and Wells Fargo & Co joined the club this month. But what does "net-zero" actually mean? For the planet, it's the point at which the levels of greenhouse gases in the atmosphere stabilize, ending the sharp increase in heat-trapping emissions since the industrial revolution that have brought us to dangerous levels of global warming. Financial institutions interpret this in a number of ways. It could mean continuing to finance carbon-intensive fossil fuel activities while finding ways to absorb carbon dioxide elsewhere, and even using creative accounting to balance its emissions score. Or it could mean actively engaging with companies to ensure they have credible climate plans, using divestment or the withdrawal of its credit and services as a threat to make sure they improve. The space in between is vast, and there's no global oversight of how the term "net zero" is used in the private sector. For years, drawing up such definitions was left to business friendly non-governmental organizations and the more progressive industry groups. The Greenhouse Gas Protocol, for example, was launched in 1997 by the World Resources Institute and the World Business Council for Sustainable Development. More recently, big financial institutions are getting directly involved in developing these standards. It makes sense that they would want as much say as possible in the rules that will govern their climate policies, especially as pressure grows for them to take stronger action. A new framework for net-zero investing announced earlier this week was developed by the Institutional Investors Group on Climate Change. The organization is made up of pension funds and asset managers who manage a combined $33 trillion, including Pacific Investment Management Co. and Fidelity International. It takes an important stand in warning against one of the biggest loopholes in net-zero pledges: using carbon offsets as a replacement for cutting emissions. The most common example is planting trees or protecting forests rather than, say, reducing reliance on coal, oil and methane. Still, the recommendations are at an early stage and don't fully grapple with the pollution that comes from companies and projects supported by the finance industry, a core part of their climate responsibility. Another influential framework is the Taskforce on Climate-Related Financial Disclosures. Established by former Bank of England governor Mark Carney and Bloomberg LP's founder Michael R. Bloomberg, it's the closest to a unifying standard in the industry for reporting climate risks. But research from ETH Zurich finds the organization has had a limited effect, largely because it relies on voluntary reporting. The authors found companies that used the framework focused on the two TCFD categories that were least important for slowing climate change—governance and risk management—while neglecting to provide much detail on strategy, metrics and targets that can have a far bigger impact on the planet. The latest initiative to gain prominence is the Taskforce on Scaling Voluntary Carbon Markets, which Carney also helped to launch. The group, which includes financiers and heavy polluters such as airlines and agriculture companies, wants to scale up the market for voluntary carbon offsets. It's drawn criticism from activists and academics for failing to address key questions such as governance, integrity, and human rights which have plagued the market. Carney himself had to walk back comments claiming that Canada's Brookfield Asset Management Inc., where he now works, is net-zero because of emissions it avoided by investing in renewable energy. The remarks prompted backlash from experts because they don't require a company to actually cut pollution, or, in Brookfield's case, actually stop funding fossil fuels. The thing all three projects have in common, and what activists warn against, is their advocacy for voluntary action. As regulators wise up to greenwashing and governments face pressure to take stronger enforcement measures, the finance industry has a vested interest in helping set the rules going forward. "I prefer capitalists self-regulate," Larry Fink, the Chief Executive Officer of BlackRock Inc. who has quickly become one of the best-known champions for greater corporate climate action, said at a Bloomberg event in January. "I'm a major believer that capitalism understands this and we're moving forward. We're moving forward because it's good for business." There are signs that real, progressive change can happen under the current system, especially when activists work with investors to push for change. On Thursday, HSBC Holdings Plc announced tougher climate goals after pressure from non-profit ShareAction and shareholders including Amundi SA and Man Group Plc. Significantly, the bank will phase out coal funding by 2040. The financial sector can, it seems, hold itself to account occasionally. But that isn't enough to guarantee the kind of emissions reductions we need to avoid the worst effects of global warming. When it comes to climate change, the stakes may be too high for governments and the public to wait and see if Big Finance can solve the problem on its own. Kate Mackenzie writes the Stranded Assets column for Bloomberg Green. She advises organizations working to limit climate change to the Paris Agreement goals. Follow her on Twitter: @kmac. 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