An examination of net-zero commitments by the world's largest banks

Abstract

Occasional Paper Series Carlo Di Maio, Maria Dimitropoulou, Zoe Lola Farkas, Sem Houben, Georgia Lialiouti, Katharina Plavec, Raphaël Poignet, Eline Elisabeth Maria Verhoeff An examination of net-zero commitments by the world’s largest banks Promising beginnings, significant room for improvement No 334 Disclaimer: This paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB. Contents Abstract Executive summary 1 Introduction 1.1 Greenwashing: tentative definition and relevance for banking supervision 1.2 Overview of current private and regulatory initiatives related to disclosures of net-zero commitments 2 3 Methodology Key findings relating to net-zero commitments 3.1 Almost all G-SIBs have communicated publicly on net-zero commitments Box 1 Illustration of an incomplete scope of disclosure 3.2 Commitments are too broadly defined 3.3 The scope of portfolio alignment metrics could be further enhanced Box 2 Illustration of a scenario overshooting a 1.5°C pathway 3.4 Exposures to carbon-intensive sectors could be better framed Box 3 Illustration of targets covering a minor share of a bank’s total exposures Box 4 Illustration of sectoral policies that do not align with net-zero ambitions 3.5 The design of targets and indicators varies significantly across banks Box 5 Several base years as a starting point Box 6 Use of percentages instead of absolute …

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