Welcome to BankTrack’s wrap-up of the most important bank-related news from two weeks of COP27 in Sharm el-Sheikh, Egypt. Overall, COP27 was partly successful and partly a failure: on the one hand, a historic Loss and Damage fund was created to deal with the destruction caused by climate change in less-developed countries already now, and on the other, the final agreement failed to officially acknowledge all fossil fuels (coal, but also oil and gas) as the root cause of those damages, let alone seek a commitment to phase them out or down, despite calls from around 84 countries for their inclusion. Little progress from banks... When it comes to the specific role and responsibilities of commercial banks, very little has moved during the two weeks in Egypt. There were some expectations on Finance Day that banks would announce more ambitious targets and commitments to address their impact on climate change, including commitments on financing fossil fuels, but in the end, it all turned out to be a non-event, with the conversation mainly about how banks can deliver on their existing commitments, focussing on client’s transition plans. This lack of ambition was in stark contrast with the announcement made in Glasgow a year earlier, where GFANZ presented itself as the breakthrough initiative that would bring the finance sector in alignment with the Paris goals. In the end, the only developments in Egypt came in the form of two reports, one from the UN’s High-Level Expert Group on Net Zero Commitments of Non-State Actors…

It was welcome news when last March, ING, the Dutch banking giant, announced that it would ‘no longer provide dedicated finance to new oil and gas fields’ and step up its ‘financing of renewable energy by 50% by year-end 2025’. The bank referenced the ‘Net Zero by 2050 Roadmap’ of the International Energy Agency (IEA) as its main inspiration for this remarkable step, stating that “massive investment is needed in clean energy and infrastructure, which will then lead to a decrease in demand for fossil fuels. [..] That reduced demand should be met by existing oil and gas fields, which means that in both the IEA’s and our view, no new fields should be needed.” A few months later, ING’s CEO van Rijswijk wrote in the bank’s climate report: “For true transformative change to happen, at the increasingly urgent speed it needs to, a concerted collaborative and consensus-based effort across all sections of society is desperately needed. We all have a part to play, and we can all do much more. Let’s do it together, before it’s too late”.  Seldom does a bank speak so clearly on the urgent need to act on climate change and end fossil fuel expansion. And indeed, the announcement of ING was not the first time it stepped ahead of its peers in making new climate commitments. But is the bank really taking decisive steps to help end the further expansion of oil and gas production? Sadly not, as two massive loopholes remain that raise serious doubts on…