No major banks have yet committed to stop funding new oil, gas and coal, research finds

‘The objectives of the Paris agreement are slipping further out of reach,’ say researchers from LSE

No major bank has yet committed to stop funding new oil and gas fields or coal capacity, research has found.

Most banks that have recently updated their climate policies have weakened them, according to the research by the TPI Global Climate Transition Centre (TPI) at the London School of Economics and Political Science (LSE).

The centre analysed 36 of the largest banks by market capitalisation and total assets, and found “banks are still at an early stage of their transition with decarbonisation targets that cover a limited set of sectors and business activities.”

The researchers evaluated banks’ climate policies using 77 sub-indicators grouped into 10 areas, called the net zero banking assessment framework (NZBAF).

They found 95% of the scores remained unchanged year on year, and those banks that had shifted had weakened their policies. On average, banks score on only 18% of the 77 sub-indicators and the best-performing bank scores on about one-third of the sub-indicators.

The report said banks have “weakened their disclosures in areas such as net zero commitments, financing conditions for high-emission sectors and fossil fuel policies”. Some banks either fully withdrew or weakened their net zero commitments, substituting firm language such as “commitment” or “target” with less precise wording such as “ambition” or “aspiration”.

Algirdas Brochard, banking project lead at TPI, said: “Given banks’ central role in the economy and their far-reaching influence on climate, their slow progress on the climate transition coupled with the recent dissolution of the Net Zero Banking Alliance suggest that the objectives of the Paris agreement are slipping further out of reach.”

Cover photo:  The report said ‘banks are still at an early stage of their transition’ to decarbonisation. Photograph: Simon Price/Alamy