City banks failing in fight against climate change as investors place more weight on environmental concerns

 
Lucy White
Giant Polar Bear Is Floated Down The Thames
France's banks led the way (Source: Getty)

The UK's major banks are failing to take action over climate change, as three City institutions have come in the bottom five in a ranking of Europe's 15 largest banks.

Royal Bank of Scotland, Lloyds Bank and Standard Chartered were weak across the four themes of climate-related risk assessment and management, low carbon products and services, public policy engagement and collaboration, and governance structures and strategy on climate-related risks and opportunities.

Read more: Banks must green up their act, for the sake of both planet and profit

Meanwhile France's banks were at the top of their game, with three falling in the top five, according to the research from Share Action. There was also good news for HSBC and UBS, which completed the top third.

"Last Wednesday, Barclays launched the UK's first green bond with UK assets only by a British bank," said Stephen Barclay, economic secretary to the Treasury. "It was the first one, which points to Share Action's argument, but it also signals a change – I know other banks are doing work on this."

Read more: HSBC and Barclays throw weight behind green finance projects

Share Action puts France's prowess in the environmental banking sphere down to new legislation in the country, that strengthens mandatory disclosure requirements and stress-testing on climate-related risks.

“It is encouraging to see that this policy approach may indeed have contributed to nudging institutions towards stronger action," said Jean Boissinot at the French ministry of finance.

The results come as environmental, social and governance (ESG) concerns are becoming increasingly important for investors. More and more "impact investment" funds are setting up, while in September a coalition of institutional investors with nearly $2 trillion under management sent a letter to 62 global banks calling for improved climate-related disclosures.

Read more: Panel of impact investing leaders recommend new £2bn UK fund and 'pensions with purpose' to boost businesses which benefit the country

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