Greenwashing a ‘systemic problem’ at UK banks
Greenwashing is a ‘systemic problem’ at UK banks despite all of them claiming sustainability is at the heart of their business, a survey released today reveals.
Only 59 per cent of lenders are measuring their carbon footprint, according to a survey of 150 UK banking executives by technology firm Mobiquity.
The survey also found all the executive think sustainability is crucial to their business.
Mobiquity warned the research highlighted the sector has a “systemic problem” with greenwashing.
Financial institutions have come under tough scrutiny by climate activists for their role in funding carbon-intensive economic activity.
The UK government has said it will put the International Financial Standards Foundation climate disclosure guidance at the heart of its corporate governance regime.
From next year, some listed companies and finance firms will have to publish their plans to cut their damaging impact on the climate.
Low levels of sustainability reporting indicate banks will need to ramp up their disclosure standards in the coming years to avoid unwanted regulatory attention.
Experts also said that greater public awareness of climate change means banks risk souring their reputation if they keep greenwashing.
“Greenwashing is an ongoing challenge for banks. They will only be able to protect their reputation if they fully optimise the execution of their sustainable initiatives,” Peter-Jan Van De Venn, strategy director fintech at Mobiquity, said.
“Banks should expect greater scrutiny of net zero targets and their implementation,” Dr Ben Caldecott, director of the sustainable finance programme at the University of Oxford and COP26 strategy advisor for finance for the UK Cabinet Office, said.
Around a third of banking executives said a lack of recognised sustainability reporting framework was a barrier to them improving their sustainability credentials.
A quarter blamed a lack of understanding of how to boost green finance activity was also a problem.