Johan Frijns, coordinator BankTrack email@example.com, M. +31-6-12421667
Bill Barclay, Rainforest Action Network (in Bonn), firstname.lastname@example.org, M +1-415-845-7201
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A new report by BankTrack, ‘Meek Principles for a Tough Climate’, launched today at the start of climate convention negotiations in Bonn concludes that commercial banks must collectively commit to bolder action to avoid financing catastrophic climate change.
The ‘Carbon Principles’ and the ‘Climate Principles’, the only two collective climate initiatives taken so far by banks, are considered to be too focused on accommodating business as usual and therefore inadequate as a response to the urgent challenge posed by accelerating climate change.
The new report analyses in detail what strengths and weaknesses are contained in the two sets of Principles, which were both launched last year.
“BankTrack welcomes the fact that the signatories to the Carbon Principles and the Climate Principles acknowledge that they must do their part in combating climate change. Given the large climate impacts of the finance sector's role in mobilizing and allocating capital and investment for high carbon activities, there is a compelling need for a robust sector-wide climate safeguard standards and code of conduct for the banking sector.
However, both the Climate Principles and the Carbon Principles are deeply disappointing. While they both contain elements that are useful, neither addresses climate change risks of bank financing with the rigor, urgency or ambition that the challenge at hand plainly requires.
To appropriately respond to this challenge, financial institutions must adopt strong climate protection performance policies and strategic objectives, combined with climate management tools and oversight mechanisms that are at least 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”
Neither the Carbon Principles nor the Climate Principles actually set performance standards to reduce the risks to the climate from their financing. Rather, they focus on reducing the risks to the banks from climate change and/or the uncertainty around anticipated regulatory responses to climate change”, said Bill Barclay, global energy and finance campaigner with the Rainforest Action Network, present in Bonn. “Much stronger leadership on climate is required”.
Johan Frijns, BankTrack coordinator 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. Serious climate policies must lead to serious shifts in their portfolios, away from fossil fuel extraction, towards investments that will stimulate the emergence of a global low carbon economy.”
The Carbon Principles can be found at: http://carbonprinciples.org/ Signatories are: Bank of America, Citi, Credit Suisse, Wells Fargo, JPMorganChase, Morgan Stanley
The Climate Principles can be found at: http://www.theclimategroup.org/about/corporate_leadership/climate_principles
Signatories are: Credit Agricole, HSBC, Munich Re, Standard Chartered, Swiss Re