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Only two of the ten largest banks in the world have joined the coalition of 130 global financial companies, agreeing to align their activities with international efforts to tackle climate change and other environmental problems.
The group that has signed up to the Principles for a United Nations Responsible Bank represents $ 47 trillion in assets. Citigroup and the Industrial and Commercial Bank of China have embraced the promise, which begins by asking companies to self-evaluate their sustainable development practices. The signatories, including the largest European banks BNP Paribas SA, Barclays Plc and UBS Group AG, also agreed to develop and publish plans and targets related to the Sustainable Development Goals by 2023.
Banks could take a broad range of more aggressive measures, such as banning thermal coal financing or setting a timetable for the phasing out of fossil fuel industry financing. One of the signatories, ING Groep NV, said last week that it would increase lending to automakers producing more electric vehicles than those producing internal combustion engine vehicles.
The principles follow another set of voluntary standards for the asset management sector – the Principles for Responsible Investment – that were adopted by fund managers 13 years ago to encourage companies to incorporate environmental, social and governance factors into their investments. The industry has since reached more than $ 30 trillion.
Among the banks that refused to participate, some said they had their own sustainable development programs. Others said they were still looking at PRB.
Goldman Sachs Group Inc. said in a statement that it was pursuing a number of similar goal-related efforts to the PRB and that it would continue to dialogue with the UN PRB as it went. that the initiative would continue. Wells Fargo & Co. stated that it was successfully working towards the goals it set in 2016 to address social, economic and environmental challenges over a five-year period. JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley declined to comment.
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UN Deputy Secretary General Satya Tripathi said the reluctance of some banks to engage is a sign that the principles have teeth. "Some are not ready to be held accountable for their loans," he said at a round table on 19 September.
The PRB was launched at the beginning of the UN Summit on Climate Action in New York. The transition to low-carbon and climate-resilient economies that are aligned with the Paris Agreement requires additional investments of at least $ 60 trillion by 2050, said Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change, in a statement.
The PRB "offers a scale of progress for each bank, although some banks start very low and have a particularly heavy scale to go through," said Peter Blom, managing director of Triodos Bank, a Dutch lender that finances renewable and organic farming. and a signatory of the agreement.
Critics say the principles are not radical enough and a four-year period to develop plans to improve sustainability is too little, too late. In a joint statement, activists BankTrack and Rainforest Action Network said: "These time scales may have been sufficient 30 years ago. Now, however, we consider them totally inadequate for our time. "
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