Progress on climate action has seemingly ground to a halt, and in some cases moved backwards, analysis of Europe’s 25 largest banks from responsible investment NGO Share Action has found.
The report assessed the banks’ approaches to tackling climate change, as well as protecting natural habitats around the world and respecting the rights of indigenous communities.
It found that while a small number of banks continue to set new targets to cut emissions in key sectors, the overall picture is “one of weak fossil fuel policies and declining ambition,” said the report.
Banks recently voted to shut down the world’s largest climate finance alliance, signaling what Share Action see as “a worrying step away” from “action to curb global heating”.
The analysis said banks are failing to take the necessary steps to address pressing environmental and social risks.
Only BNP Paribas, Crédit Mutuel, La Banque Postale and Rabobank scored above 50%. The average score across all 25 banks was just 41%.
Share Action also noted that fossil fuel policies remain “far from aligned with climate science” and the expansion of fossil fuel infrastructure remains largely unchecked.
The report noted that just four banks rule out finance for liquefied natural gas terminals, despite IEA warnings of an oversupply of natural gas.
And fewer than half have restrictions on financing pipelines or other oil and gas infrastructure.
In addition, Share Action highlight that new sustainable finance targets show “declining ambition”, with five banks who have adopted new sustainable finance targets since May 2024 have scaled down in ambition.
“Banks have a crucial role to play in steering the economy through the challenges being thrown up by the climate crisis,” said Xavier Lerin, head of financial sector research at Share Action. “Yet instead of leadership, most banks are slowing down their progress on climate and a concerning minority are even backsliding on commitments.”
The report also calls on regulators to address the progress on regulation that “hardwires climate responsibility into banking operations”.
This could be done, note Share Action, by requiring banks to publish credible transition plans and updating capital rules to reflect the high-risks of fossil fuel investments.
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