How are banks doing on sustainable finance commitments? Not good enough

(Eco Business, 3 Oct 2019) World Resources Institute’s new Green Targets Tool shows that only 24 of the 50 largest private-sector banks have made a sustainable finance commitment — and the targets vary considerably.

Private sector banks can play a pivotal role in financing the transition to a low-carbon, sustainable future — and they face growing political, market and social pressure to do so.

Indeed, just last week at the UN Climate Summit in New York City, we saw banks making new commitments to disclose the carbon emissions of their investment and loan portfolios, adhere to the new Principles for Responsible Banking, and more.

Another way banks have been signaling their response to growing pressure from shareholders, businesses and governments is through sustainable finance commitments: public, time-bound commitments to provide or facilitate capital for climate and sustainability solutions.

So what are these commitments? And are they rigorous enough to meet the scale of the challenge?

WRI’s new Green Targets Tool offers the first-ever platform to explore and compare the details of private sector banks’ sustainable finance commitments. The tool presents data for each commitment, according to nine indicators focused on specificity, accountability and magnitude. Four big takeaways emerge:

1. Fewer than half of major banks have made a sustainable finance commitment.

The Green Targets Tool analyses the world’s 50 largest private-sector banks. As of July 2019, only 23 of them had a sustainable finance target. (Since July 2019, only one major bank, the Canadian Imperial Bank of Commerce, has announced a sustainable finance commitment.)

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Eco Business, 3 Oct 2019: How are banks doing on sustainable finance commitments? Not good enough