A report by Boston Common Asset Management report titled "Banking on a Low-Carbon Future" reveals that banking sector fails to recognize climate risks and opportunities and to take adequate climate action. The report examines progress of 59 of the world’s largest banks in stepping up their effort to capture climate risks and opportunities. 

Special attention has been given to bank’s climate strategies, implementation of 2oC scenario analysis or other risk assessments, and disclosure on low-carbon products and services. Achieving the main objective of the Paris Agreement, to limit the global average temperature rise to well below 2°C above pre-industrial levels, requires an adaptation of the entire global economy by reorienting investments to support the transition to a low-carbon economy. In this context, the One Planet Summit in Paris (2017) recognized that financial sector should take longer-term perspective by better accounting for climate. Greening of financial flows may significantly shift investments towards a low carbon economy and may lead to the involvement of the private sector in the fight against climate change. However, the report indicates that less than half of banks implement climate risk assessments or 2°C scenario analysis and only 46% of banks have set explicit objectives and targets for low carbon products and services. 

A majority (61%) have failed to restrict the financing of coal and the global banking sector provided $600 billion in financing to the top 120 coal plant developers between 2014 and September 2017. The report points to large regional disparities among banks around the world. World climate-risk assessments have been undertaken by 80% of European banks and only 33% of banks in regions including the North America and Asia. The Report concludes that $12 trillion investment is needed by 2030 in renewable power generation alone to limit global warming to 2°C. 

Boston Common Asset Management