Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Banks worth $47 trillion adopt new U.N.-backed climate principles

EconomySep 22, 2019 02:11PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Matthew Green

UNITED NATIONS (Reuters) - Banks with more than $47 trillion in assets, or a third of the global industry, adopted new U.N.-backed "responsible banking" principles to fight climate change on Sunday that would shift their loan books away from fossil fuels.

Deutsche Bank (DE:DBKGn), Citigroup (N:C) and Barclays (L:BARC) were among 130 banks to join the new framework on the eve of a United Nations summit in New York aimed at pushing companies and governments to act quickly to avert catastrophic global warming.

"These principles mean banks have to consider the impact of their loans on society – not just on their portfolio," Simone Dettling, banking team lead for the Geneva-based United Nations Environment Finance Initiative, told Reuters.

Under pressure from investors, regulators and climate activists, some big banks have acknowledged the role lenders will need to play in a rapid transition to a low-carbon economy.

Financing for oil, gas and coal projects has come under particular scrutiny as climate scientists step up calls to change the global economy's deep reliance on fossil-fuels to avert disastrous warming.

The principles, drawn up jointly by U.N. officials and banks, require lenders to:

- Align (NASDAQ:ALGN) their strategies with the 2015 Paris Agreement to curb global warming and U.N.-backed targets to fight poverty called the Sustainable Development Goals

- Set targets to increase "positive impacts" and reduce "negative impacts" on people and the environment

- Work with clients and customers to encourage sustainable practices

- Be transparent and accountable about their progress.

The principles' main backers say the norms will encourage banks to pivot their loan portfolios away from carbon-intensive assets and redirect capital to greener industries.

Critics argue that banks should go much further by explicitly committing to phasing out financing for fossil fuel projects and agribusiness that drive deforestation in the Amazon (NASDAQ:AMZN), Southeast Asia and other regions.

However, the new standards could also force participating banks to choose between foregoing business from clients in high-carbon sectors and the risk of being accused of backsliding on the principles if they continue to finance such firms.

Although the initiative is voluntary, Dettling, who played a central role during 18 months of negotiations with a core group of 30 founding banks, said lenders would be reluctant to accept the reputational risk of losing their signatory status.

"They need to demonstrate that they are making progress — and progress within a given timeline," Dettling said.

"Ultimately, banks that are not in line with their commitments and do not make progress can be stripped of their signatory status," she said.

Banks in Europe, in particular, also face growing regulatory pressure to disclose their exposure to the potential impact of climate-related disasters and a low-carbon energy transition on their asset base.

Bank of England Governor Mark Carney, who has joined counterparts in France and the Netherlands to push for better supervision of climate risk, was due to address the U.N. climate summit on Monday, according to a draft agenda.

Other banks to join the "Principles for Responsible Banking" initiative included Danske Bank (CO:DANSKE), ABN Amro (AS:ABNd), BNP Paribas (PA:BNPP), Commerzbank (DE:CBKG), Lloyds Banking Group (L:LLOY) and Societe Generale (PA:SOGN), according to a statement.

Banks worth $47 trillion adopt new U.N.-backed climate principles
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Gary Maynard
Gary Maynard Sep 22, 2019 6:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Try reading Behold! A Pale Green Horse by Stephen Pidgeon. Explains the push by the elites to force the climate change theory on us all.
Al Vlaj
alvlaj Sep 22, 2019 6:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The guy who preaches End Times Bible Prophecy?? He’s a nut.
Silverbug 19
Silverbug 19 Sep 22, 2019 3:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
In the 20's terrible dust bowls, 50's major flooding but hardly any cars or whatever these loonies think.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email