Investors Demand Top 60 Banks to Take Action Against Climate Change

The investors have written to the CEOs of the largest banks in the world including Deutsche Bank, JP Morgan Chase, HSBC Holdings, Bank of America, Mitsubishi UFJ Financial Group, and Australia’s majors.
A report published on Bluenotes website mentioned that the letter was coordinated by ShareAction and Boston Common Asset Management, and calls for tougher and more appropriate climate-related disclosure to be given to investors on four major aspects:

  • climate-relevant strategy and implementation
  • climate-related risk assessments and management
  • low-carbon banking products and services
  • public policy engagements and collaboration with other actors on climate change

The letter is a priority for global banking regulators, and it also asks for greater transparency from banks in terms of the methods they utilise to manage the financial risks related to climate change.
Luiz Awazu Pereira da Silva highlighted the key elements of how regulators were thinking in a recent presentation at a forum titled “Green finance: Can it Help Combat Climate Change?” The forum was coordinated by the BIS, OMFIF, World Bank Group, and Deutsche Bundesbank.
He said, “Any good policy to combat climate change requires a ‘price’ to act as an incentive to reduce a negative externality such as greenhouse gases (GHGs), in line with basic welfare economics.”
Da Silva also stated that a “shadow price” would be sufficient to lessen emissions in a perfect world. “In particular, in the cost-benefit analysis of investment projects, (we should) to take into account these negative externalities (congestion, pollution, toxic emissions).”
“The ‘right price of carbon’ is a tricky issue. We need to be pragmatic and use various metrics to reach emission targets, calculating abatement costs while incorporating all the available information on new technologies that reduce them,” he added.
The letter from ShareAction demanded details from the banks regarding their plans to assist and aid the transition to a low-carbon economy – implying an investment of up to US$93 trillion by 2030.
To read the full report of Bluenotes, click here.

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