Banks say they can help build scale in voluntary carbon markets, by providing services from market-making to deal origination and stewardship. But some say it is too early for such intervention, arguing that profits still need to go into developing technologies.
Banks globally are grappling with the challenge of decarbonising their lending portfolios. Dutch lender ING has devised sector pathways for the nine most emissions-heavy sectors in its loan book – here’s how it did so.
With investors pushing back on what they see as weak or immaterial claims by issuers of sustainability-linked debt, banks are now citing similar concerns – though they are still arranging deals seen as questionable.
The lucrative business of securities lending – often criticised for lacking transparency and not being aligned with long-term responsible investment – is in the spotlight more than ever. But ESG-related standards are being developed for the industry.
As one of the more eager issuers of bonds linked to inflation, the UK faces the prospect of higher borrowing costs as high inflation begins to look less temporary than initially expected. Sustainability-linked bonds, relatively new instruments, could provide a long-term antidote.
Over 2,000 governments and businesses have signed up to some form of net-zero commitment, but, in the midst of a 'code red' for humanity, 2050 feels a very long way away. Richard Mattison, president of S&P Global Sustainable1, discusses how we can accelerate progress.
Banks account for around half of the $130trn in private capital Mark Carney said at the Cop26 summit was aligned with net zero, but there is widespread scepticism about the announcement. Senior executives from some of the biggest lenders give Capital Monitor their take.
Capital Monitor research shows that only one in four banks have linked CEO pay to environmental impact metrics, and the ESG targets that have been set often lack transparency and impact – despite growing stakeholder pressure to address such issues.
Despite positive noises at Cop26, analysis conducted by Capital Monitor of lenders’ fossil fuel policies underlines why critics remain sceptical of the Net-Zero Banking Alliance’s ability to get signatories to align with International Energy Agency recommendations.
The lender is the first globally to release a comprehensive sustainability strategy to exit fossil fuels and the first in Europe to have its climate goals validated by the Science-Based Targets initiative. We speak to its CEO about why he believes such moves make good business sense.
The Task Force on Climate-related Financial Disclosures says corporate reporting on climate scenarios is improving but remains minimal. Asset managers say they want to see better models, but data providers suggest there may be more behind this resistance to greater disclosure.
Last month the Japanese bank joined the growing list of its peers pledging to hit net zero by 2050. But how will it achieve that and what will it mean in terms of impact, given the firm derives most of its revenues from wholesale banking and has little exposure to high-carbon sectors?
Pressure is growing for prudential measures to help tackle the climate crisis, with banks facing a rise in estimated credit losses of up to 20% in a 'hot-house' scenario. But bankers say climate-related stress tests should not lead to more capital requirements, and some propose alternatives.
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