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Bank climate group members to report capital markets emissions
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Bank climate group members to report capital markets emissions
Mar 13, 2024 5:36 AM

LONDON (Reuters) -A U.N.-backed banking climate coalition on Wednesday released updated guidance for members requiring them to disclose more about how they plan to cut carbon emissions, including for the first time those from their capital markets activities.

The Net-Zero Banking Alliance (NZBA) whose 143 members oversee $74 trillion in capital said the guidelines will also see more data disclosed on client transition planning and advocacy.

The guidelines, which confirm a story first reported by Reuters, maintain ambition in the face of a tough political backdrop, the group said, including pressure on some members from U.S. politicians citing anti-trust concerns.

"We are still here at the table, we are not watering down, we are expanding the scope, doubling down on 1.5 degrees and not moving away from that," said Remco Fischer, head of climate at the U.N. Environment Programme Finance Initiative, which acts as the secretariat for the NZBA.

The 2015 United Nations Paris Agreement commits countries to limit the global average temperature rise to well below 2 degrees Celsius above pre-industrial levels and to aiming for 1.5 C (2.7 degrees Fahrenheit), a level that, if crossed, could unleash far more severe climate change effects, scientists say.

While the guidelines are bolstered with references to each bank acting independently - given the U.S. backlash - they also explicitly refer to a global plan to shift from fossil fuels.

As well as reporting capital markets emissions, which for some banks can be as much as those tied to their loans, the banks will be asked to disclose the coverage of each of their targets as a percentage of their exposure, to help show impact.

Banks will also be asked to show the actions they have taken to advocate with regulators and policymakers for a net-zero pathway and more detail about how they assess clients' plans to do the same, including though related bank policies.

Despite the pressure from some Republican politicians over banks' membership of climate-related coalitions, Sarah Kemmitt, who heads up the NZBA secretariat, said legal advice meant they were confident there was no case to answer.

"We have obtained a legal view... we think we are on very safe ground as regards to antitrust."

Among those banks pushing for more ambition, Netherlands-based lender Triodos Bank said it had voted against the new guidelines as it did not believe they were strict enough, but would remain in the group.

"The guidelines provide too much leeway for banks to decide which guidelines to comply with and which not... Yet, we believe that global cooperation is the only way in which we have a chance to limit the climate crisis," it said in a statement.

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