A group of investors managing $11 trillion in assets is calling on banks to set radically enhanced emissions targets ahead of a key meeting aimed at tackling climate change.
The group, which includes Aviva Investors and Legal & General Investment Management, said banks have a “critical role” in aligning the economy with net zero targets.
The Institutional Investors Group on Climate Change is calling on a public commitment to become net zero by 2050 with interim targets.
The group said since the 2015 Paris agreement the world’s biggest 60 banks have provided $3.8 trillion of financing for fossil fuel companies, with 2020 levels higher than 2016.
The investors are urging banks to cease activities through deforestation and land-use change as well as from fossil fuel financing. It said “unproven” negative emissions technology and avoided emissions arising from green finance can’t be used as offsets.
“Organisational net zero commitments will not have the impact needed – just as asset managers and asset owners are making commitments focused on their portfolios rather than their direct emissions,” the group’s chief executive Stephanie Pfeifer said.
The intervention, which comes ahead of the Leaders Summit on Climate later this week, also calls for the withdrawal of financing to “misaligned” activity that runs counter to the net zero pathway for industries.
While a number of banks have made public commitments to tackling climate change but statements have been vague.
“With five years already elapsed since the Paris Agreement, talking the talk must be replaced with walking the walk,” Pfeifer added.
The investors have already opened engagement with 27 of the world’s largest banks, including HSBC and Morgan Stanley, and said it expects to expand the list over time.