January 11, 2008

Ceres Ranks Banks On Climate Change

The banking sector still has a long way to go in confronting the business challenges posed by global climate change, according to a report issued today by Ceres that analyzed climate change governance practices of 40 of the world’s largest banks.In the report, Corporate Governance and Climate Change: The Banking Sector (PDF), Ceres says that a growing number of European, U.S. banks and Japanese banks are responding to the risks and opportunities presented by climate change, primarily by setting internal greenhouse gas reduction targets, boosting climate-related equity research and elevating lending and financing for clean energy projects. But many others are still not addressing climate change and only a handful of the 40 banks have begun integrating climate risks into their core business of lending by pricing carbon into their finance decisions or setting targets to reduce GHG emissions in their lending portfolios.

Using a 1- to 100-point scoring system, the two highest scoring banks were European-based HSBC Holdings and ABN AMRO with 70 points and 66 points, respectively. More than half of the 40 banks scored under 50 points, with a median score of 42 points.

The five highest scoring banks were all based in Europe - HSBC, ABN AMRO, Barclays, HBOS and Deutsche Bank - followed by Citigroup, Bank of America and the Royal Bank of Scotland.According to Ceres:

•  The banks have issued nearly 100 research reports on climate change and related investment and regulatory strategies, more than half of them in 2007 alone;
• 34 of the 40 banks responded to the latest climate-disclosure annual survey conducted by the Carbon Disclosure Project, a nonprofit group that seeks information on climate risks and opportunities from companies on behalf of investors;
• 28 of the banks have calculated and disclosed their GHG emissions from operations and 24 have set some set some type of internal reduction target;
• 29 of the banks reported their financial support of alternative energy, eight of which alone have provided more than $12 billion of direct financing and investments in renewable energy and other clean energy projects.
• Many of the 40 banks have done little or nothing to elevate climate change as a governance priority - a trend that cuts across European, North American and Asian banks alike.

Bank Profiles:

U.S. Banks (pdf)
Canadian Banks (pdf)
European Banks (pdf)
Asia/Pacific Island/Other Banks (pdf)

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