Financing by banks and insurance companies is helping to prolong the dominance of fossil fuels in our energy supply, delaying the transition to a clean energy economy. The sixty largest global banks have provided the fossil fuel industry with $5 trillion in financing since the Paris Agreement was signed. Bank lending must shift quickly from supporting a fossil fuel economy to enabling one based on clean and sustainable energy, transport, agriculture, and manufacturing systems.
Our Theory of Change
Investors are calling on banks to assess and manage the climate risk embedded in their lending and investment portfolios. Measuring and managing a bank’s salient risk – the risk to society – will require accurate measurement of the bank’s financed emissions and development of effective transition plans.
The Business Case for Action
Each of the major banks has publicly committed to aligning its financing with the goals of the Paris Agreement to achieve net zero emissions by 2050, however, in many cases their lending – particularly for fossil fuel expansion projects – belies these commitments. Apart from the dangers these financing practices are posing to the planet and people, these incongruities also pose material financial risks to the banks and their shareholders that warrant stronger scrutiny and action.
Through a combination of dialogue and the filing shareholder resolutions, ICCR’s members are pressing top banks in the U.S. and Canada to adopt more climate-friendly policies and practices that better align with their public commitments to net zero by 2050.
How ICCR is spurring decarbonization in the financial sector: