Global banks miss climate targets – WRI Study

Global banks are falling short of their climate targets, failing to significantly cut financing for activities that contribute to climate change, a new study by the World Resources Institute (WRI) revealed.

The analysis, which assessed 25 major lenders, found that banks are not on track to meet their net-zero goals and that many commitments are less ambitious than they appear.

The report highlights that most banks’ portfolio emissions reduction efforts are misaligned with the 1.5°C warming limit, with expected reductions falling short of necessary levels.

For example, emissions from the auto sector were reported to be 28 per cent above the desired levels in 2022 and are projected to triple the benchmark by 2030.

The study also points out that many banks do not include corporate finance or advisory services in their coal targets, leading to ineffective phaseout policies. Additionally, banks have been criticised for supporting lobby groups that obstruct climate-friendly legislation.

WRI researchers Anderson Lee and Amanda Carter emphasise that banks need to enhance the quality and credibility of their climate commitments and align their practices with net-zero goals.

They argue that banks should increase investments in green finance and resist political and special interest backlash to better address climate risks and capitalise on new business opportunities related to the climate transition.

Attribution: Bloomberg

Subediting: M. S. Salama