New Report Criticises ESG Targets Of Top 20 European Banks

A recent study by ShareAction reveals that European banks are not meeting their green finance targets. The study analysed the claims of the top 20 lenders in the European Union, the UK, Switzerland, and Norway. It suggests that the targets and disclosures are inadequate and could be misleading. This comes at a time when global efforts to limit global warming to 1.5 degrees Celsius face significant challenges, with only a 14% chance of success, according to the United Nations.

ShareAction, known for advocating climate-change resolutions at banks, criticises the lack of transparency in banks’ green finance goals. The study emphasises that these goals often lack realistic plans for achieving net zero emissions by 2050 and that methodologies for green claims are not adequately explained. Additionally, many banks include products and services in their green targets that may not truly qualify as green financing.

Given the influential role of banks in shaping the global economy, ShareAction recommends industry-wide practices for greater transparency. These include publishing clear methodologies for green financing goals and requiring banks to report the impact of their green financing activities. The study also emphasises the need for disclosure of positions on green-related regulatory issues and membership in climate-related trade associations.

ShareAction highlights specific issues with some banks, such as the inclusion of unrelated products in green targets and a lack of reporting on the impact and additionality of green finance activities. The study calls for a more standardised and accountable approach across the banking industry to address environmental concerns and contribute meaningfully to global sustainability goals.