ASIA PACIFIC
Net zero and sustainability are amongst the key factors often named by experts as likely to shape the future of banking. On the surface, it seems to be the case: lenders have been quick to outline ESG goals.
The biggest banks globally notably made pledges under the Glasgow Financial Alliance for Net Zero (GFANZ), whose commissioned research shows low carbon energy investments need to account for at least 80% of energy investments compared to fossil fuels by 2030 to reach climate goals.
But the pledge may be for nought, as at least as of mid-2022, no bank is set to reach the minimum requirement needed to reach climate goals, according to a report released by Sierra Club, Fair Finance International, BankTrack, and Rainforest Action Network.
The study, which made use of data gathered by the Profundo organization, found that only 7% of energy financing extended by 60 banks globally went to renewables. Meaning, of the US$2.5t loans and bond underwriting provided by 60 banks to energy companies between January 2016 to July 2022, US$2.3t were loaned for fossil fuel energy production-and just $178b were used for clean energy activities such as wind and solar.
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