Half of high-street banks lagging on climate policies, research finds
New analysis has warned that half of the UK’s largest banking current account providers have weak policies in place to restrict funding into the fossil fuel sector and commodities linked to deforestation such as beef, soy, timber and palm oil.
New analysis from non-profit Reclaim Finance and Which? compared the fossil fuel investments and environmental policies of 13 leading UK financial institutions. Of these, only three – Nationwide, The Co-operative Bank and Triodos – had adequate climate policies in place to be awarded the Which? Eco Provider badge.
However, six of the banks fall into a “red” category for financing – JPMorgan Chase, Santander, Barclays, HSBC, NatWest (including RBS) and Lloyds (including Halifax and Bank of Scotland). These banks were found to have “weak” fossil fuel policies and lacked ambitious or target statements on key agricultural commodities.
Of the banks in the red category, there are a variety of differences in financing, policies and promises and the analysis does point out that Lloyds and NatWest are less involved in fossil fuels and agriculture than the rest. Transparency levels, verified data and target credibility were also considered in the ranking.
Which? Money’s deputy editor Sam Richardson said: “Consumers seeking to make more sustainable choices might want to consider switching banks if they are uncomfortable with their money being invested in the fossil fuel industry and other projects which could be damaging to the environment.”
JPMorgan Chase was the worst-performing bank in the study. Since the Paris Agreement, it has financed more fossil fuels than all the assessed banks put together, and got the lowest score for positive environmental impact. It contributed $434.15bn to fossil fuel financing between 2016 and 2022. The company has said that it is targeting $1trn for green initiatives by 2030 to help “clients accelerate their low carbon transition”.
On the other end of the red spectrum, Lloyds was revealed to have a much lower exposure to fossil fuels compared to others in the list, but it does not yet exclude all financial services for firms with oil/gas expansion plans. The organisation told the analysts: “We are actively working with oil and gas clients to establish credible transition plans by the end of 2023. We know time is critical.”
The analysis arrived in the same week that it was revealed that more than 90 UK universities that have committed to divest from fossil fuels continue to bank with leading fossil fuel funders.
Each of the 95 universities analysed holds a relationship with at least one of the UK’s banking giants including Barclays, HSBC, Santander, NatWest, and Lloyds.
Global banks have collectively funnelled more than $5.5trn into the fossil fuel sector over the past seven years, according to previous research from Reclaim Finance.
The report makes it clear that US-based banks are by far the largest financiers of the fossil fuel sector, having contributed more than $1.5bn of the $5.5bn provided since 2015. Canada and China are also top offenders, having contributed close to $1bn each.
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