Global banking sector failing climate emergency


Boston Common Asset Management (BCAM) has released a new report which analyses the impact which operations by the banking sector has on the environment.

The study has revealed that the global banking sector is failing climate emergency.

Green banking and risk assessment options have made no significant difference to real-world global lending and investment practice, according to the study.

Researchers engaged with 58 of the world’s major banks to find that despite 69% of banks endorsing Task Force on Climate-related Financial Disclosures (TCFD) guidelines, disclosing TCFD governance reforms (71%) and conducting climate risk assessments (78%), respondents found that these tools are not having an impact on decision-making.

The report claims that around 40% of banks aren’t developing any new financing or investing restrictions as a result of such measures, with only “superficial progress” made to date, with the financing of fossil fuels continuing to increase annually, despite new green services entering the market.

BCAM has urged banks to adopt clear strategies for decarbonising their operations, and set explicit targets to increase the proportion of sustainable finance commitments made, and publicise their definitions of ‘low carbon’ and ‘green’ investment to ensure clarity in overarching climate strategies.

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Lauren Compere of BCAM said: “The scale of the climate crisis demands a more radical transformation of the banking sector.

“Our findings indicate a systematic reluctance by banks to demand higher standards from high carbon sector clients, despite the fact that doing so could vastly reduce bank risk and accelerate action on climate change.”