The world’s biggest banks aren’t telling stakeholders what they need to know to judge how big the industry’s carbon footprint is, according to a fresh study.
Only five global banks have disclosed the quantitative results of climate scenario analyses to shareholders and clients, according to a report published on Tuesday by the Transition Pathway Initiative Global Climate Transition Centre, an independent research and data provider based in London. And only six of the 26 banks analyzed have disclosed a commitment to immediately end all on- and off-balance sheet finance for new coal capacity, the study shows.
The role played by banks in financing greenhouse gas emissions is drawing increasing attention from activists and regulators as time runs out to limit global heating to the critical threshold of 1.5C. Yet years after the biggest banks in the US and Europe committed to eliminate their financed emissions, few banks have moved beyond target-setting.
However, banks aren’t including all types of financing activities nor all high-emission sectors in their targets, suggesting they could continue bankrolling high-emitting projects and companies for the long term, the TPI Centre said. At the same time, climate disclosures “remain partial and selective,” it said.
The study ranked 26 global banks using the TPI Centre’s Net Zero Banking Assessment Framework, which assesses financial firms’ progress on implementing their stated climate-related policies and plans. The framework covers 10 areas spanning emissions disclosure, to policies for excluding finance for fossil fuels as well as commitments to a just energy transition.
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