It`s got to change. Investors are increasingly starting to challenge banks over their fossil fuel policy, as evidenced by the shareholder decision coordinated by ShareAction, recently submitted to Barclays. It calls on Barclays to end a plan to gradually provide financial services (including project financing, business financing and access to employment) to energy companies as well as gas and electricity suppliers that do not meet the paris climate agreement targets. Shareholders will vote on May 7. From a technical point of view, too, there was disappointment. It was hoped that the parties would finally agree on the rules that should govern global co2 markets (Article 6 of the agreement). However, this has been postponed for this year`s discussions. Pending significant policy changes, the Principles for Responsible Investment (PRI) and other organizations developed the inevitable political response and assessed its consequences. It estimates that by 2030, the major countries will have taken steps to phase in coal consumption and introduced additional carbon prices. By 2035, they will have banned the sale of new cars using fossil fuels. It is important that financial institutions and investors anticipate and respond to these measures.
At the same time, they can make an active contribution by adopting a climate investment strategy. Discover BNP Paribas Asset Management`s sustainable investment solutions and find out what sustainability means to us. Get positive environmental and social effects. ClimateSeed is your trusted partner to support emissions reduction projects and improve your sustainable development goals. What is positive is that all the banks surveyed seem to be actively pursuing to increase green financing and develop a range of low-carbon products and services, ranging from green mortgages to green bonds. However, efforts are being slowed by challenges in defining what is considered „green,“ a lack of data at the corporate and project level, and increased transaction costs. One of the results of Climate Action 100`s commitment is that Shell is now leaving the „American Fuel – Petrochemical Manufacturers“ lobby group by supporting the various climate policies by supporting the Paris targets. The oil and gas group is reviewing its direction with a total of 19 industrial organizations. Finally, investors can exert influence by investing, financing or excluding certain activities. BNPP AM, for example, does not invest in tobacco or coal-fired power plants.
And COP-25 saw an oil giant`s first public promise to achieve zero net emissions by 2050. Meanwhile, the European Investment Bank (EIB) has announced, in an unprecedented move, that it will stop lending to almost all fossil fuel projects after 2021. It is now the first multilateral development bank to go this far with a fossil fuel lending policy. The overall poor performance of this survey should be a real concern for shareholders, customers and regulators: the failure to meet climate targets will exacerbate the effects of climate change, including increased droughts, floods and extreme weather events, as well as sea level rise. This will have a negative impact on banks` portfolios in the years and decades to come. It is therefore in the interest of the banks to take urgent and drastic measures today to ensure a viable planet for all in the future. Emilie Westholm, head of investment at Folksam, said: „It is a great concern for shareholders that European banks are doing so poorly in dealing with the climate crisis.