Banks taking only ‘superficial’ climate action, study reveals

(EurActiv, 11 Nov 2019) Despite an explosion in green finance, banks have made only superficial changes to their lending practices, with fossil fuel funding going virtually unabated over the past years, according to a new report by Boston Common Asset Management released on Monday (11 November).

The report “Banking on a Low-Carbon Future: Finance in a Time of Climate Crisis” highlights the slow pace of change when it comes to greening the financial system.

Efforts to green the financial sector have been “largely superficial,” the report says, with banks “failing to change their lending or investment practices” as a result of sustainable finance initiatives.

Researchers who collected data for the report engaged 58 of the world’s largest banks, including the likes of HSBC, JP Morgan Chase, BNP Paribas and MUFG.

Their findings paint a stark picture. Although a great majority of banks (69%) have endorsed the guidelines by the Taskforce on Climate-related Financial Disclosures (TCFD), few have translated them into practice.

  • Just 50% of banks engage high-carbon clients on transition strategies ;
  • Only 12% ask high-carbon sector clients to adopt TCFD guidelines ;
  • And only 16% of them exclude clients involved in deforestation.

As a result, financing for fossil fuel projects continues to rise each year, totalling $1.9 trillion in 2016-2018 (€1.7 trillion), the report found.

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EurActiv, 11 Nov 2019: Banks taking only ‘superficial’ climate action, study reveals