Banks’ green pledges under scrutiny

Banks’ green pledges under scrutiny

As global leaders gather in Glasgow to hammer out a new climate deal, the financial sector faces growing calls to scale back its business with carbon-intensive sectors and live up to some of the promises it has already made to tackle global warming.

Scrutiny of banks’ lending has intensified in the run-up to COP26 in Scotland, the biggest meeting of its kind since the Paris climate deal was agreed. The financing of highly polluting fossil fuel industries has been one of the most contentious topics, leaving banks such as Barclays, Deutsche and BNY Mellon open to accusations of double standards.

Across the global banking sector “too many fossil fuel restriction policies currently contain too much wiggle room, discretion or hazy definitions”, said analysts at Autonomous Research.

High-profile investors includinghedge fund manager Chris Hohn have also lambasted banks for continuing to service the fossil fuel industry, which he said was allowing “systemic risk” to build in the global financial system.

The ties between financial institutions and fossil fuel companies stretch from funding coal mines, backstopping debt issuance and lending directly to power producers.

BNY Mellon has found itself embroiled in controversy in the build-up to COP26. The US bank was in talks to sign up to