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A third of the world’s banks, worth a total of US$47 trillion in assets, committed on Sunday to align their business to the Paris Climate Agreement, in the biggest pledge to climate sustainability from the banking sector yet.
As many as 130 banks, in cooperation with the United Nations, launched the Principles for Responsible Banking on Sunday, one day ahead of the UN Climate Action Summit in New York.
The founding signatories that established the Principles for Responsible Banking collectively represent more than US$17 trillion in assets and include Barclays, BBVA, BNP Paribas, ING, Nordea, Santander, and Societe Generale. The full list of all 130 signatories also includes Deutsche Bank, Danske Bank, Citi, UBS, Commerzbank, Credit Suisse, Lloyds Banking Group, and the Royal Bank of Scotland.
The Six Principles for Responsible Banking include alignment of the business to the Paris Climate Agreement targets, managing risks from activities, encouraging sustainable practices with clients, aiming to achieve society’s goals, setting public targets relating to the most significant impacts, and working be transparent in and accountable for these principles and their achievement.
“A banking industry that plans for the risks associated with climate change and other environmental challenges can not only drive the transition to low-carbon and climate-resilient economies, it can benefit from it,” Inger Andersen, Executive Director of the United Nations Environment Programme (UNEP), said. “When the financial system shifts its capital away from resource-hungry, brown investments to those that back nature as solution, everybody wins in the long-term,” Andersen noted.
Many banks, especially in Europe, have faced in recent years increased public and activist pressure to stop funding fossil fuel projects. Some of them have said they would stop providing project-specific financing for coal-fired power plants or exploration and production of oil sands and oil in the Arctic.
The Principles for Responsible Banking and their signatories will now account for the impact of their actions not only on their business but also on the society and its progress toward reaching the Paris Climate goals.
“The Principles represent an important, collective step forward which will enable us to take further action on climate change and build a more sustainable and inclusive economy,” Jean-Laurent Bonnafé, Director and Chief Executive Officer at BNP Paribas, said in a statement.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.