Recent research by Ethical Consumer magazine found that only two of the main 36 banks offering current and savings accounts in the UK were able to “clearly demonstrate” effective plans to reduce their carbon impacts.
The review explored how banks were measuring the climate impacts of the projects they were lending to, and what their plans were to change this to meet the global targets agreed in Paris in 2015.
According to the research, Triodos Bank and the Ecology Building Society were the only two lenders that “properly grasped the seriousness of the situation” and received a best rating.
Both lenders report their carbon emissions, including those of their loans and investments, using the Partnership for Carbon Accounting Financials (PCAF) methodology.
According to the Ethical Consumer, other lenders were “still evidently struggling to get to grips with the immensity of the task, though their reporting was full of fine words such as ‘we are committed to supporting a successful transition to a low carbon, climate-resilient economy’, or we are working with other banks to ‘integrate climate considerations into lending decisions’”.
Other lenders gave future targets for when their measurements might be complete, however.
The Ethical Consumer said that NatWest’s was “one of the most ambitious”, stating that it aimed “to quantify our climate impact and set sector-specific targets by 2022.”
Other banks, however, had “only had vague commitments” according to the research.
Rob Harrison, editor of Ethical Consumer magazine asked: “Why would you be investing in new coal or gas plants in 2020?
“Infrastructure like this is normally planned to be operating for up to 40 years. This seems to make no sense if we have a collective target of getting to net-zero carbon emissions by 2050 – which is now only twenty years away.”
Ethical Consumer has now called consumers to take action, stating: “Choosing a bank with a moral compass is one of the most important actions that consumers can make to help address their own carbon impacts.”