Third of biggest banks fail to sign up to climate initiative

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Twenty-eight of the world’s largest banks haven’t signed up to a climate change initiative backed by Bank of England governor Mark Carney that encourages companies to disclose the dangers world warming poses to them.

More than a 3rd of the world’s high 75 banks by belongings have nonetheless not declared their help for the Task Force on Climate-related Financial Disclosures (TCFD), an initiative to get firms to calculate their publicity to climate danger and disclose this to traders, in accordance to a report from BCS Consulting.

The listing of banks that don’t but help the TCFD is dominated by establishments in China, the place the initiative has had little impression. But there are additionally some giant lenders within the US and Europe that haven’t signed up, together with Italy’s UniCredit, Germany’s Commerzbank and San Francisco-based lender Wells Fargo, the report mentioned.

UniCredit mentioned the financial institution would sign up within the “very near future” whereas Commerzbank mentioned it was “on [its] agenda”.

Wells Fargo mentioned: “We recognise the growing concerns about climate change and environmental sustainability, and we’re working to find solutions.”

The TCFD was launched in 2015 by the Financial Stability Board and has been championed by Michael Bloomberg, the media billionaire and Mr Carney, a former FSB chairman.

Although the TCFD is an initiative geared toward all companies, help from banks is seen as essential as a result of of their function in financing actions that would contribute to world warming.

Some giant traders have joined Mr Carney in pushing for banks to do extra to mannequin their climate danger, from the impression of elevated flooding on their mortgage books to whether or not new inexperienced insurance policies may harm the enterprise fashions and creditworthiness of their company shoppers.

Mr Carney final week warned in a speech that progress had been “uneven”, noting that even amongst supporters of the TCFD simply 25 per cent had supplied a “fuller set” of climate disclosures.

He signalled that companies had two years earlier than regulators in some jurisdictions together with the UK and EU moved to make such disclosures obligatory.

The authors of the BCS report discovered that the speed at which banks are signing up to help the TCFD has “slowed significantly”. Only 9 have endorsed the initiative this yr, in contrast to 29 in 2018 and 38 in 2017, when firms may sign up for the primary time.

“If you look at the number of banks that are being added every year, the number gets smaller, and there seem to be signs of stagnation,” mentioned Hector Fontaine, sustainable finance lead at BCS Consulting.

He added: “Is it going to get any bigger? If not, there’s a question around mandatory disclosure.”

In complete, 76 banks have signed up as supporters of the initiative, accounting for 40 per cent, or $59tn, of world banking belongings, the report mentioned. However, simply 39 banks have began disclosing climate danger info in keeping with the TCFD framework, accounting for 24 per cent of world banking belongings.

Additional reporting by Olaf Storbeck in Frankfurt

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