A group of 100 global investors amongst whom Ethos and the members of the Ethos Engagement Pool international called on the world’s largest banks for more commitment to fight global warming by financing the transition to a low-carbon economy.
In letters sent by investors led by Boston Common Asset Management (US) and ShareAction (UK) to 62 banks – including UBS and Credit Suisse, as well as Citigroup, Goldman Sachs and Deutsche Bank – the group called for enhanced disclosure of banks’ climate-related risks and opportunities and of how these are being managed by banks’ boards and senior executives.
The global banking sector stands at a crossroad on climate. The Paris Agreement became effective in November 2016 and has catalyzed the urgency of climate risks such as ‘stranded assets’ i.e. assets that suffer from premature write-downs due to fossil fuel phase-out. At the same time this shift offers unprecedented opportunities for banks to finance the transition to a low carbon future. These developments are set to have a profound impact on the banking sector over the short, medium, and long term. For these reasons there is a growing need among institutional investors for robust climate-related disclosures and risk management from the banking sector.
Against this backdrop, the central banks have formed the Task Force on Climate-related Financial Disclosures (TCFD) to issue recommendations for climate-related corporate disclosure to investors. The recommendations cover four areas: climate-relevant strategy and implementation, climate-related risk assessments and management, low-carbon banking products and services, and the banks’ public policy engagements and collaboration with other actors on climate change. As these recommendations remain voluntary progress depends on investors pressing companies for action!
As part of this campaign Ethos and the members of the Ethos Engagement Pool international will continue to engage UBS and Credit Suisse to ensure the letter leads to concrete actions and improvements.