Banks Respond To Pressures To Go Green

These days some of the largest banks in the world have warmed to the issue of climate risk by focusing on research looking at the impact of global warming. Focus on investments, cutting their own greenhouse emissions and funding clean-energy projects are all important these days.

Unfortunately only a few of the world’s 40 largest banks are integrating climate risks into their lending practices and targeting reduced greenhouse-gas emissions in their lending portfolios.

While the pressure on banks is coming from all directions: clients, employees, government and the banks’ own research, it’s ultimately causing them pause because it’s finally affecting their bottom line financially.

Most of the changes have come in the past year to year and a half. 29 of the banks report that their financial support of alternative energy is high, eight have provided more than $12 billion in financing and investments in renewable energy and other types of clean-energy projects but unfortunately only 12 of the 40 banks have board level involvement.

As climate change is creating new markets and at the same time, new risks, banks are perhaps better equipped than most industries to address the changes due to their ability to move their capital around where they see fit. Go figure.

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