25 biggest European banks are failing on their own green pledges

Over the last decade or so, the laws of countries across the developed world have not kept up with changes in our knowledge of threats to the natural world. As a result, promises to not fund projects that destroy ecosystems are what consumers have to go on in choosing which bank to let use your money.

Yet, out of the 25 biggest European banks none are actually living up to their promises. ShareAction, the body which carried out the research, did state that some banks such as NatWest are doing well on net zero targets, and restricting funding for fossil fuel projects.

However, importantly, almost all these banks are failing on the areas of biodiversity, exposure to high carbon sectors, policies restricting funding for oil and gas and finally linking executive pay to progress on climate issues. I suspect that any bank that does link executive pay to climate action would change this rapidly – we must wait to see, which bank shareholders force this on. The exceptions are NatWest ING and Credit Agricole. Given the risk that banks are at with any investment in fossil fuels, I can see more banks making this commitment – from a financial risk point of view if nothing else.

There is an increasing move away from fossil fuels. As countries move away from fossil fuels in many sectors there is a serious risk of fossil fuel companies owning rights to drill (which often cost billions) which there is no demand for the oil, Indeed, this is such a risk there is now a term for it – Stranded assets.

Currently, there are roughly 1.2 billion passenger vehicles on the road. The International Energy Agency predicts that by 2040 there will be 140 million electric vehicles on the worlds roads (roughly 7% of all vehicles on the road). that compares to the 2 million electric vehicles on the road today. What will this do? Well, it will reduce demand for oil by 2 million barrels a day. A far smaller swing in oil demand has in the past destroyed the markets ability to function properly, and a permanent reduction of this size (and one that will only grow) may well be the final death knell in fossil fuel production on a grand scale.

What should we do? Well we should write to our banks and demand the do better. We also need to write to our parliamentary MP and demand that legislation is put in place to force the changes that are required. Perhaps more significant would be to move your business away from the big banks. There are increasing numbers of small banks that are doing the right thing, we are going to move.

I suggest that you look into how your bank behaves and move if they are not performing in a way that protects the planet.

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