Leading green banks pledge to bring portfolios in line with Paris Agreement goals

An international group of over 50 green, ethical, and co-operative banks has this week launched a new Climate Change Commitment that will see many of its members pledge to align their carbon footprint and investment portfolios with the goals of the Paris Agreement.

The Global Alliance for Banking on Values (GABV) held its annual summit in Vancouver late last month and yesterday announced that nearly 30 of its members have signed up to a new Climate Change Commitment, dubbed the 3C initiative.

The new commitment states that the GBAV's members have a strong track record of pioneering responsible finance that has sene them finance "positive social, environmental and cultural change all over the world". But it adds that work to tackle climate change and decarbonise the economy is "more urgent now than ever".

"That is why the GABV's 3C initiative members have committed to assess and disclose the climate impact of their portfolio of loans and investments within a period of three years, and ultimately to ensure the climate impact of their loans and investments are in line with the Paris Agreement," the statement concludes.

Initial signatories to the commitment include Europe's Triodos Bank, UK-based Ecology Building Society, Credit Cooperatif from France, Germany's GLS and Umwelt bank, and a host of banks and credit unions from the US, Canada, South America, and Asia.

The signatories intend to use a standardised measurement methodology developed by a group of Dutch banks known as the Platform for Carbon Accounting Financials (PCAF) to calculate the greenhouse gas emissions of their loans and investment portfolios.

The banks, which together have combined assets of $153bn, intend to then set emissions targets in line with the Paris Agreement's 2C goal, in the process providing evidence to the wider banking sector that such targets can be successfully implemented.

"Values-based banks and financial institutions from right across the world have come together in recognition of the fact that where we allocate our capital matters for our environment," said Peter Blom, chair and co-founder of the GABV and CEO of Triodos Bank. "The Climate Change Commitment is a powerful, practical example of action the banking industry can take to contribute concretely to efforts to address the climate crisis.

"By assessing and disclosing their greenhouse gas emissions, banks can see their contribution to greenhouse gas emissions. This enables them to make financial decisions that limit the impact of the emissions of their financed assets so they can keep their contribution within safe environmental levels, helping to safeguard the environment for future generations."