Top banks commit to climate targets
Chicago — HSBC Holdings, Societe Generale, BNP Paribas and other banks, insurance companies and financial firms around the world moved a step closer to reducing their contributions to greenhouse-gas emissions.
Fifty-five firms have committed to a framework released on Thursday for setting climate goals specific to mortgages, bonds and other asset classes in their portfolios, said the Science Based Targets initiative (SBTi), a consortium that developed the framework.
The SBTi has been helping companies figure out how they should change their operations, such as energy usage in factories and offices, to align with the 2015 Paris climate agreement, which asks countries to aim to limit Earth’s temperature increase to no more than 1.5°C. The consortium is now zeroing in on how financial firms should change their lending and investing activities.
Under the SBTi framework released on Thursday, firms would set goals such as adjusting their mortgage financing to reduce emissions per square metre or changing electricity-generation project financing to cut emissions per kilowatt-hour. Starting on Thursday, firms have two years once they commit to have their targets validated by SBTi, which would assess whether the targets are aligned with the Paris climate agreement.
“There are a number of high-level commitments out there that financial institutions are making,” said Cynthia Cummis, head of private-sector climate work at World Resources Institute, one of the research groups behind SBTi.
Morgan Stanley, for example, said last week it would eliminate the net carbon emissions generated by its financing activities by 2050.
Environmental non-governmental organisations see the “financial sector as a laggard on climate action, and would like them to be a lot more transparent on what their impact is on the climate”, Cummis said. “We provide a structure or framework for financial institutions to show that they’re actually making progress against high-level commitments.”
Among the 55 firms that have signed on, 30 are European, including Standard Chartered, ING Groep and Credit Agricole. Only seven North American firms have committed, including Amalgamated Bank, Principal Financial Group, MetLife and Mexico’s Grupo Financiero Banorte SAB de CV.
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