Bank investors are at the vanguard of climate push
(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)
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(Editing by Neil Unmack and Oliver Taslic)
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