BankTrack’s expanded False Solutions Tracker, launched today, confirms the findings of the pilot version: false solutions are almost systematically included in the scope of banks’ sustainable finance targets. These energy technologies – including biomass; carbon capture, usage and storage (CCUS); and nuclear power – are incompatible with a just energy transition and should not be labelled as “sustainable” by banks. Yet, fully 29 out of 30 banks assessed counted at least one of these towards its green targets.(1)

Almost all the banks (28 out of 30) include either solid biomass or liquid biofuels, or both, in their sustainable financing. While most of them set criteria such as a carbon-intensity threshold, other banks just include any type of these energy technologies. This is problematic, as both fuels not only often exacerbate forest destruction and climate change, but can also have consequences for public health.

Nearly half of the 30 banks (14 out of 30) include CCUS in the scope of their sustainable finance targets, and only nine explicitly exclude it. This is despite CCS being an expensive and unproven technology at best, and at worse an excuse for continued fossil fuel expansion.

More positively, although seven banks consider nuclear power as “sustainable”, almost two thirds (18 out of 30) explicitly exclude it from the scope of their sustainable finance goal. Long construction times, high costs and waste management issues are only some of numerous issues linked to the development of new nuclear power capacity. 

The science is clear: limiting global warming in line with the Paris Agreement objectives requires a shift from the current fossil fuel-based energy system towards clean energy production. In December 2023, in Dubai, the COP28 called on Parties to the United Nations Framework Convention on Climate Change (UNFCCC) to transition away from fossil fuels in energy systems and in a just, orderly and equitable manner and to triple renewable energy capacity globally by 2030. 

As part of their climate strategy, most commercial banks individually set sustainable finance targets. Although they differ from bank to bank, all these time-bound targets aim at providing a certain amount of financing to economic activities that banks consider “sustainable”.(2) 

While real solutions – such as wind, solar and storage, and investment in grids –  can contribute to a just energy transition towards energy democracy, provided they are developed with respect for human rights, false solutions do not. Indeed, biomass, biofuels, CCUS, fossil hydrogen and nuclear power are energy technologies whose environmental and social adverse impacts are incompatible with a just transition. When banks choose to include these technologies within their sustainable finance targets, they reduce the amount of financing available for real solutions such as renewable energy. 

BankTrack is urging banks to immediately exclude false solutions from the scope of their sustainable finance targets and to massively invest in renewable energy, and grids and storage, in line with a just energy transition.

Notes for editors

(1) Out of the 30 banks assessed, only Commonwealth Bank of Australia explicitly excludes solid biomass, biofuels, CCUS and Nuclear Power from its sustainability funding target.

(2) Only half of the banks assessed in this tracker have a transparent and coherent policy document on their website that explains the scope of their sustainable finance targets.

Note that DBS, State Bank of India, BPCE and UBS are included in the Tracker, although they do not have a sustainable finance target. For these banks, the information in the Tracker is based on the information reported by the banks regarding green bonds issuance.

BankTrack chose to include RBC in the expansion of the False Solutions Tracker despite the recent announcement that it would abandon its sustainable finance targets, to highlight the fact that RBC was not in any case fully excluding any of the four false solutions from its target.