No major banks have yet committed to stop funding new oil, gas and coal, research finds | Fossil fuel divestment

Research has shown that no major bank has yet committed to stopping financing new oil and gas fields or coal capacity.

Most banks that have recently updated their climate policies have relaxed them, according to research from the TPI Global Climate Transition Center (TPI) at the London School of Economics and Political Science (LSE).

The center analyzed the 36 largest banks by market capitalization and total assets and found that “banks are still in the early stages of transition with decarbonization goals that span a limited set of sectors and activities.”

The researchers assessed banks' climate policies using 77 sub-indicators grouped into 10 areas called Net Zero Banking Assessment System (NZBAF).

They found that 95% of estimates remained unchanged from year to year, and those banks that changed relaxed their policies. On average, banks score on only 18% of the 77 sub-indicators, and the best-performing banks score on approximately one-third of the sub-indicators.

The report said banks “were weakening disclosure in areas such as net zero commitments, financing terms for high-emission sectors and fossil fuel policies.” Some banks have either abandoned or weakened their net-zero commitments, replacing firm language such as “commitment” or “goal” with less precise language such as “ambition” or “aspiration”.

Algirdas Brochard, TPI Banking Project Manager, said: “Given the central role of banks in the economy and their far-reaching impact on the climate, their slow progress in the climate transition coupled with the recent dissolution of Net Zero Banking The Alliance suggests that the goals of the Paris Agreement are becoming increasingly out of reach.”

Not only are many banks failing to stop financing fossil fuel projects, but they are also failing to finance climate solutions and the green transition. Of the 36 banks assessed by the TPI, 17 have climate finance goals, but the activities eligible for this financing vary from bank to bank.

Another recent study found that major global banks have provided almost $7 trillion (£5.6 trillion) in financing to the fossil fuel industry since the Paris Agreement to curb carbon emissions.

This year the Banking Alliance is Net Zero switch off completely after leading banks abandoned it following the election of US President Donald Trump. He called on members to reduce the carbon emissions of their investments and contribute to the transition to net zero emissions by 2050.