Our latest research, conducted as part of our guides to current and savings accounts, asked how banks were measuring the climate impacts of projects they were lending to and what their plans were to change practices to meet globally agreed targets. The 36 banks and building societies were then rated as either a best, middle or worst for their carbon management and reporting.
Only two small ethical lenders, Triodos Bank and the Ecology Building Society, appeared to have properly grasped the seriousness of the situation and received a best rating. They had both partnered with the Dutch “Partnership for Carbon Accounting Financials” in order to report their carbon emissions, including those in their loans and investments. Both received a best rating.
Others were still evidently struggling to get to grips with the immensity of the task, though their reporting was full of fine words such as “we are committed to supporting a successful transition to a low carbon, climate resilient economy” (Bank of Ireland), or we are working with other banks to “integrate climate considerations into lending decisions.” (Citibank)
Some banks were more specific, giving future targets for when their measurements might be complete. Natwest’s was one of the most ambitious, stating that it aimed “to quantify our climate impact and set sector-specific targets by 2022." Most others though only had vague commitments.
Our assessment also required that banks explicitly ruled out financing all new fossil fuel extraction projects in the future.
All of the mainstream high street banks, with the exception of the Co-operative Bank, fell at this hurdle. Why would a bank still be investing in new oil wells and coal mines in 2020? Infrastructure like this is normally planned to be operating for up to 40 years. This seems to make no sense if humans have a collective target of getting to net zero carbon emissions by 2050.