Banks must do more on climate – BankTrack
London, 2 April: Banks are not doing enough to ensure they are not “financing climate catastrophe”, BankTrack has said.

More collaborative action is needed, the Netherlands-based NGO network argues in Meek Principles for a Tough Climate.

The report describes as “deeply disappointing” the two existing collaborations by the banking sector: the Carbon Principles, in which some US banks promised to evaluate and address the carbon risk of financing electric power plants, and the Climate Principles, intended to set voluntary best-practice standards on managing banks’ own carbon footprints and assisting their clients in reducing their climate impacts and moving to a low-carbon economy.

Johan Frijns, co-ordinator of BankTrack, said: “We do not expect banks to take full responsibility for solving the climate crisis, but it is an undeniable fact that the way banks choose to invest will make a huge difference to the climate.”

The report particularly criticises the Carbon Principles and Climate Principles for their “vague or aspirational procedural provisions where substantive, outcome-oriented standards are required”.

“While they both contain elements that are useful, neither in its present form addresses climate change risks with the rigor, urgency or ambition that the challenge at hand plainly requires,” the report says.

“To appropriately respond to this challenge, financial institutions must adopt strong climate protection performance policies and strategic objectives and climate management tools, and oversight mechanisms that are as comprehensive and rigorous as those that they already use to ensure compliance with other corporate policies and strategic objectives, such as their credit rating and risk management frameworks or their human resources policies.”