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Climate Change  Result of climate change in Africa (source: www.transitionnow.org)
what is at stake
Global climate change is the planet's greatest environmental challenge, directly threatening the prosperity, livelihoods and immediate security of billions of people worldwide. There is overwhelming scientific consensus that most of the observed increase in globally averaged temperatures since the mid-20th century has been due to the increase in human-induced greenhouse gas (GHG) concentrations in the atmosphere (carbon dioxide, methane, nitrous oxides and a number of gases that arise from industrial processes). The most important GHG is carbon dioxide, which is emitted mainly as a consequence of global fuel combustion, with land-use change (especially deforestation) providing another significant but smaller contribution. -readmore- If annual emissions were to remain at today's level, the stock of GHG in the atmosphere would reach double pre-industrial levels by 2050 - that is 550 ppm CO2. However, as demand for energy and transport increases around the world, and fast-growing economies invest in high-carbon infrastructure this level could well be reached by 2035, causing a global average temperature increase exceeding 2°C by that year. Under such a business as usual scenario, there is 50% risk of global warming having exceeded 5°C by the end of this century, leading to catastrophic impacts on people and planet According to the Intergovernmental Panel on Climate Change (IPCC), world temperatures could rise by between 1.1 and 6.4°C by the end of this century. This will probably result in:
These developments are not only creating extraordinary and unprecedented risks to the global environment, but are also likely to have profound and potentially disastrous economic, social and health impacts:
Banks are in a unique position to catalyze the necessary transition to an economy that minimizes GHG pollution and relies on energy efficiency and low/no carbon energy sources by using their commercial lending and securities underwriting to capitalize new climate-friendly activities. Venture capital and private equity can provide critical financing for emerging low-carbon technologies. Asset management, when combined with active ownership strategies such as shareholder engagement and proxy voting, can positively impact companies' climate strategies. selected standards and initiatives
---Also read BankTrack's climate strategy paper for our position on climate change and what banks can do.--- The most important international standards and initiatives relevant for the issue of climate change are listed below. Setting reduction targets To date, the 1992 UN Framework Convention on Climate Change (UNFCCC) and its 1997 Kyoto Protocol is the key international treaty addressing the threat of global climate change. The UNFCCC establishes overall global objectives and principles, and requires all member countries (near-universal membership) to report annually on their net greenhouse gas emissions. The Kyoto Protocol entered into force in 2005, with the participation of all industrialised countries except the United States and Australia. It builds on the principles and objectives of the UNFCCC and establishes targets and timetables for industrialised countries to limit or reduce their emissions of greenhouse gases to an average of 5.2 per cent below 1990 levels. Developing countries, almost all of which have joined the UNFCC and Kyoto Protocol, are not obliged to set specific targets and timetables for addressing greenhouse gas concentrations. -readmore- In December 2009, the 15th UN Climate Change Conference took place in Copenhagen, to agree upon a new treaty to complement or replace the Kyoto Protocol. The meeting failed to reach agreement on an extension of the Kyoto Protocol for the second commitment period and/or of any additional legally binding instruments under the Convention, instead agreeing to continue negotiations on these issues for at least one more year. Many, but not all, of the Parties also agreed to the Copenhagen Accord, a non-binding framework in which Parties agreed to inscribe mitigation targets and to work towards agreement on a number of objectives through the UNFCCC process. Assessing and reporting on climate emissions The most widely accepted standard for accounting, measuring and reporting on greenhouse gas emissions by companies is the Greenhouse Gas Protocol (GHG Protocol). Besides general measuring instruments for the companies' own activities the GHG Protocol also develops sector specific guidelines, and a standard for the emissions of products and supply chain. The GHG Protocol is consistent with the guidelines issued by the IPCC for reporting on direct and indirect emissions at a national level. The Carbon Disclosure Project is a coalition of institutional investors which regularly asks the world's largest companies to report their annual investment-related and emissions information relating to climate change. Recently the CDP started to act as a secretariat for the Climate Disclosure Standards Board (CDSB) that was formed at the 2007 annual meeting of the World Economic Forum in response to increasing demands for standardised reporting guidelines on the inclusion of climate change information in mainstream reports. The Reporting Framework was officially launched for comment on 25 May 2009 at the World Business Summit on Climate Change in Copenhagen. Shifting towards climate-friendly technology A WWF study Climate Solution demonstrated that existing renewable energy sources and proven technologies could be harnessed between now and 2050 to meet a projected doubling in global demand for energy while at the same time achieving the necessary significant drop (about 60-80 percent) in carbon dioxide emissions needed to prevent dangerous climate change. This result can be achieved while excluding nuclear power, unsustainable biomass and unsustainable forms of hydroelectricity. Designing and building sustainable, environment-friendly buildings is of great importance to affect the greenhouse gas emissions in the coming decades. A September 2007 report from the UNEP Sustainable Buildings and Construction Initiative, in which United Nations Environment Program and a number of international construction companies work together, provides a good overview. A comparison of activities in the field of sustainable construction of the largest British construction companies in September 2005 is published by WWF UK and Insight Investment. In the area of transport and logistics new technologies to reduce GHG emissions or to achieve more sustainable way of transport are available. With the EST project the OECD established guidelines for sustainable transport in 2000 and presented a new vision on transport. content of a bank policy
Banks should play a leading role in shifting investments towards a low/no carbon economy, by setting more aggressive de-carbonisation standards than the national targets. This would help delay or halt the accelerating process of global warming. To play this role, the following elements should be included in a bank's climate change policy: essential elements
The bank will not invest in companies that:
Furthermore, the bank will aim to minimize the extent to which its remaining activities and investments contribute to climate change by:
additional elements
The bank will:
scores
how do we score this?
analysis scores climate change
Many banks (29) have published a position statement or climate policy, with only four banks not receiving any points. However, most of these statements focus mainly on curbing operational emissions, whereas a banks' impact on climate change through its financed emissions is much more significant. Banks recognise their role in financing climate change by financing very carbon intensive industries, but none of the banks has translated this recognition into an investment policy with strict exclusion criteria or reduction targets with respect to carbon emissions. Several banks join initiatives such as the Carbon Disclosure Project (42) or sign up to the Carbon Principles (6) or Climate Principles (6) for which they receive a score of 1. Banks also publicly state their intentions to increase investments in renewable energy and innovations that help societies' transition to a low carbon economy but such statements are hardly ever translated into clear investment and exclusion criteria.
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