While French banks have shown leadership in green banking encouraged by legislation ShareAction said that few European banks have yet to put in place a coherent action plan for climate-related risk management despite the demands of institutional investors.
ShareAction ranked Europe’s 15 largest banks on their disclosure and management of climate-related risks and opportunities after all of them participated in its survey. The results showed French bank took three of the top five spots in the rankings.
The top five banks – scored out of a possible 162 points – were BNP Paribas (107), UBS (107), UBS (92.5), Credit Agricole (92) and Societe Generale (89). The findings show that the French leadership is due to the Article 173 legislation which strengthens mandatory disclosure requirements and stress-testing for banks in France on climate-related risks.
Laurence Pessez, head of group corporate social responsibility at BNP Paribas, said: “We are pleased to learn that ShareAction’s Banking on a Low-Carbon Future survey has identified our banks as the leader among the largest European banks in terms of our response to climate change. As an international bank, our role is to help drive the energy transition and contribute to the decarbonisation of the economy. We hope our experience on this journey so far will be helpful to our peers in the development of their own climate strategies.“
Meanwhile, three UK listed banks were ranked in the bottom five, which ShareAction said was an important message for London’s position a global financial centre as low-carbon finance grows in profile. The worst performing banks, according to the research, are RBS (54), BBVA (52.5), UniCredit (42) and Lloyds Banking Group (37).
The report assessed banks’ performance across four themes: climate-related risk assessment and management; low-carbon products and services; public policy engagement and collaboration and governance structures and strategy on climate-related risk and opportunities.
ShareAction said the results of the survey highlighted the variable performance of major European banks with most providing weak responses to questions on their specific exposures to climate-related risk and opportunities. BNP Paribas was the only bank to respond to a question about the percentage of high-carbon assets on its balance sheet ShareAction said.
In September a coalition of institutional investors, coordinated by ShareAction and Boston Common Asset Management, sent a letter to the chief executives of 62 global banks calling for improved climate-related disclosures.