Banks, Climate and Energy

Climate change, a manmade phenomenon, is one of the greatest environmental threats of our time. According to the Intergovernmental Panel on Climate Change (IPCC), failure to reduce ever-growing greenhouse gas emissions may result in a global temperature increase of up to 6°C by the end of this century. To prevent the worst impacts on ecosystems and society from climate change, greenhouse gas emissions need to be reduced by 80% by 2050. Achieving this goal requires drastic action on each level of society.

Banks, like all companies, produce greenhouse gases (GHG) directly from their activities. Their most important contribution to GHG emission is indirect, through the financing of clients and projects that generate GHG emissions. Banks also continue to play a key role as major financiers of the oil and gas industry, effectively delaying the much needed shift away from a fossil fuel-based to a renewables/solar economy.

Bold steps to take
In December 2009, during the Copenhagen climate conference, BankTrack issued it's revised position paper on their role and responsibility in combating climate change. To play their part banks should develop climate policies and practices along the following lines:

First, Banks should take steps to disengage from all activities and projects that substantially contribute to climate change. They should:

• End support for all new coal, oil and gas extraction and delivery;
• End support for all new coal-fired power plants; and
• End support for the most harmful and least efficient practices in other GHG-intensive sectors, such as agriculture, forestry and transportation;

Second, Banks should also minimize the extent to which their remaining activities and investments contribute to climate change. They should:

• Assess and report on GHG pollution associated with all their loans, investments, and other financial services;
• Establish sufficiently ambitious portfolio and business-unit emissions reduction targets in line with current science on climate stabilization; and
• Develop a set of tools to address climate issues and reduce GHG pollution across the full range of their operations and services.

Third, Banks should increase their support for the development and use of climate-friendly technologies and production processes. They should:

• Increase support for GHG pollution reduction technology, renewable energy production and energy efficiency in all business lines; and
• Develop products and services to help retail customers address climate change.

Banks should not engage in so called ‘false solutions' to climate change, such as carbon trading and the financing of nuclear energy, large scale hydropower, biofuel production with a negative socio-environmental impacts, natural gas exploration and carbon capture and storage.

Our member groups work hard to pressure banks to deal with the climate catastrophy in a way that does justice to the severity of the threat.