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This report builds on ShareAction’s earlier work to present a comprehensive ranking of European banks based on their policies and performance across four key themes:
1. Climate-related risk assessment and management
2. Low-carbon products and services
3. Public policy engagement and collaboration with other actors on climate change
4. Governance structure and strategy on climate-related risks and opportunities
Lloyds Banking Group and UniCredit have been placed at the bottom of a new table ranking Europe’s top banks by their responses to climate change.
ShareAction, the responsible investment campaign group, classed the UK and Italian banks as “bystanders” on the issue of climate change, judging them to have done the least to prepare for the challenges and opportunities of switching to a low-carbon economy.
BNP Paribas, UBS and HSBC were judged to be the most responsive to the issue by ShareAction. It scored the banks based on their responses to a survey earlier this year, which asked how they manage and assess climate change risk, as well as the low-carbon products they have launched.
Lloyds said: “We remain committed to reducing our own energy consumption and are considering what other action we can take to support the transition to a low carbon economy.” UniCredit could not be reached for comment. Investors are becoming worried about the lack of disclosure on climate-related risks.
Investors are becoming worried about the lack of disclosure on climate-related risks.
More than 100 of them with over $2tn of assets under management wrote to 62 of the world’s biggest banks, calling for a strengthening of climate-related disclosures. The issue is also attracting the attention of regulators.
ShareAction said the fact that the three big French banks all scored highly reflected recent regulation forcing them to disclose more on the issue. The Bank of England is planning to publish its review of climate-change risks in the UK banking system in the coming months.
“The financial implications of a low-carbon transition in particular are significant, implying the reallocation of tens of trillions of dollars of investments,” said Sarah Breeden, executive director of international banks supervision at the BoE’s Prudential Regulation Authority. “Though climate-related risks may not crystallize in full in the near-term, actions over the next decade may be decisive,” said Ms Breeden.
France’s BNP Paribas has been at the forefront of the “green finance” movement, with plans to invest €15bn in renewable energy by 2020 and promising to stop doing business with companies whose primary activity involves oil and gas extracted from shale deposits or tar sands.
Equally, HSBC recently promised $100bn of finance for low-carbon technology and sustainable development by 2025 as part of a package of measures to tackle climate change that includes reducing its support for coal fired power stations.
Most of the 15 banks surveyed by ShareAction said they planned to implement the recommendations of the Task Force on Climate-Related Financial Disclosures, which was set up by Mark Carney, governor of the Bank of England, and Michael Bloomberg, the media owner, to establish voluntary standards for reporting financial risks linked to climate change.
Source: Financial Times
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