Not Banking on Climate Change...Yet
The banking sector still
has a long way to go in confronting the business challenges posed by
global climate change, according to a report by Ceres, a coalition of
investors, environmental groups and other public interest
organizations.
Banks and financial institutions, with nearly $6 trillion in
market capitalization, are a key player in combating the impacts of
climate change and supporting the investments necessary to move the
world economy toward reduced greenhouse gas (GHG) emissions, Ceres
officials stated.
ccording to the report, some banks are setting internal GHG
reduction targets, boosting climate-related equity research and
elevating lending and financing for clean energy projects. Many others
are still not addressing climate change, and only a handful of the 40
banks studied have begun integrating climate risks into lending by
pricing carbon into their finance decisions or setting targets to
reduce emissions in their lending portfolios.
"More banks realize that climate change is a big business
issue, but their responses so far are the tip of the iceberg of what is
needed to tackle this colossal global challenge," said Mindy S. Lubber,
Ceres president. "As a key provider of capital and financing worldwide,
banks must do more to move the economy away from fossil fuels and
high-carbon investments that are exacerbating climate change."
The report employs a "Climate Change Governance Checklist" to
evaluate how 16 U.S. and 24 non-U.S. banks are addressing climate
change through board of director oversight, management performance,
public disclosure, emissions accounting and strategic planning. The
report uses data from securities filings, company reports, company Web
sites, third-party questionnaires and direct company communications.
The report ranked 16 U.S., 15 European, five Asian, three
Canadian and one Brazilian bank. The 40 companies include several
different classes of financial services firms, including diversified
banks, investment banks and asset managers. The final scores are
weighted to reflect the fact that some of the banks -- specifically,
asset mangers and investment banks -- are not engaged in the full
spectrum of product and service offerings assessed by the Climate
Change Governance Checklist, Ceres officials stated.
For more information on the report, "Corporate Governance and Climate Change: The Banking Sector," visit www.ceres.org.