Markets

Bank investors are at the vanguard of climate push

Reuters Reuters


(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

LONDON (Reuters Breakingviews) - Shareholders, not regulators, are making the loudest noises on climate change. A group of investors with $4.2 trillion of assets under management have written to lenders https://shareaction.org/wp-content/uploads/2021/07/COP26-investor-letter-to-global-banks.pdf including JPMorgan, HSBC, and Deutsche Bank. Organised by campaign group ShareAction, they’re advocating quicker steps to align banks’ loan books with the goal of keeping global temperature increases below 1.5 degrees Celsius compared with pre-industrial levels, including cutting back on funding coal projects. Compare that with supervisors like the Bank of England and European Central Bank, who are slowly conducting “green stress tests” that won’t initially feed into regulatory capital requirements. 

The investor push is necessary. Different companies have varying definitions of what’s meant by “Paris-aligned” and “net zero”. A concerted shareholder effort can unify them. And there’s a precedent for bank investors forcing chief executives into action: after the financial crisis, shareholders demanded that lenders hit new capital targets quickly even though regulators gave them years. (By Liam Proud)

On Twitter http://twitter.com/breakingviews

Capital Calls - More concise insights on global finance:

Nomura extends prime broker woes

Weibo take-private talk stirs Sina holdouts

JEDI’s lesson on best laid plans

Toyota benefits from doubly weird auto market

Teneo calls its own experience

(Editing by Neil Unmack and Oliver Taslic)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More