Banks have promised much in terms of environmental action, but there lurks a suspicion that not all are really trying that hard. Research by the WRI’s Financial Institutions Net Zero Tracker has assessed their work as a whole.

Using a sample of 25 banks across 10 countries, including banks with large total assets as well as smaller firms playing a prominent role in net-zero finance, the banks’ net-zero commitments across four themes: transparency and ambition, implementation, credibility, and nature and equity were considered.

The results show that net-zero commitments “can’t be taken at face value” and are not all equally ambitious or credible. Many leave out important elements that should be part of a comprehensive net-zero strategy, such as aligning public policy engagement with net-zero and creating an incentive structure that ensures senior leadership will pursue implementation.

Banks’ targeted emissions reductions are also not aligned with holding global warming to 1.5C. Except for the power sector, banks’ current portfolio emissions and their emissions reduction targets are not in line with pathways needed to limit warming to 1.5C.

Banks still provide too little green financing compared to fossil fuel financing. The median ratio of green finance to fossil fuel finance for the sample was merely 1.3-to-1 between 2018 and 2022, despite the broad inclusion of financing activities under “green” finance.

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