A new tracker launched by 13 NGOs reveals the biggest global banks do not have the basic policies and financing targets needed to support decarbonisation of the power sector.
The new Sustainable Power Policy Tracker (SPPT), which is intended to encourage the banks to commit to financing sustainable power, looks at whether the 60 biggest global banks have the targets and policies in place to ensure a transition to decarbonised power. The tool scores banks for their targets and policies on sustainable power with banks scored from 0-5 for each criteria, with 0 reflecting no policies / targets, and 5 equal to best practice.
The policies in the tracker reveal that while some European banks have a target for financing sustainable power supplies, they are leaving the door open to financing false solutions in the name of the transition and almost all continue to support the expansion of fossil fuels. This is at a time when annual funding for the energy transition needs to be multiplied by 2.5 between now and 2030 to achieve net zero by 2050, according to the International Energy Agency.
Campaigners are calling on the banks to massively increase their support for sustainable power and to immediately stop supporting the expansion of fossil fuels.
While 2/3 of the assessed banks have adopted targets for decarbonising power supplies, following the International Energy Agency’s Net Zero Emissions scenario, the scenario also says that a significant increase in finance for sustainable power is required.
The tracker, which finds that none of the world’s biggest banks are currently on track, examines:
- The definition of sustainable power used by the banks.
- Whether the banks had specific financing targets for sustainable power.
- Whether they had a target for delivering financed new installed capacity for sustainable power.
- Whether there was transparent reporting of their activities linked to sustainable power.
According to the new tool, just 8 banks globally have a target for financing sustainable power supplies: the French banks BNP Paribas, BPCE, Crédit Agricole, Société Générale, La Banque Postale, the German bank DZ Bank and Dutch banks ING and Rabobank. Yet, none of the banks excluded “false solutions” such as biomass or fossil fuel related technologies from their definition of “sustainable” and none of the banks had clear targets for increasing installed capacity.
European banks all scored weakly for transparent reporting, with UK banks HSBC, Standard Chartered and Lloyds scoring zero.
In the United States, none of the banks, which include Citi, Bank of America and JP Morgan have capacity targets or financing targets for sustainable power.
While finance for the energy transition remains well below what is needed, almost all banks continue to finance the expansion of fossil fuels. Only 2 banks – La Banque Postale and Danske Bank – have made a committment to stop financing oil and gas expansion.
Reclaim Finance and partners are encouraging banks to step up and support the energy transition by adopting policies to support power generation from sustainable sources by committing to a 6:1 financing ratio by 2030 for sustainable power compared to fossil fuels (with six dollars for sustainable power supply for every one dollar spent on fossil fuels) and by immediately ending support for fossil fuel expansion.
The tracker is co-published by Reclaim Finance, Beyond Fossil Fuels, Sierra Club, Bank on Our Future, Rainforest Action Network, ShareAction, Friends of the Earth France, Climate Action Network France, WWF, Make My Money Matter, Banktrack, ReCommon, FinanceWatch