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What are Large Global Banks Doing About Climate Change?

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Abstract

We review the "climate action plans" of Global Systemically Important Banks (GSIBs) and the progress they are making toward achieving them. G-SIBs have identified the drivers of climate risk and their transmission channels to credit and other risks. Additionally, some have started to measure and model these risks. While most GSIBs have committed to fully offsetting their emissions by mid-century, they are only beginning to measure financed emissions resulting from their loans and investments, which comprise the vast majority of their emissions. G-SIBs have also committed to increase green finance and have started to do so. All told, despite some progress by large global banks to address climate change considerations, much work lies ahead to properly measure and disclose climate-related risks, and to better align financing activities with their net-zero targets.

Suggested Citation

  • Daniel O. Beltran & Pinar Uysal, 2023. "What are Large Global Banks Doing About Climate Change?," International Finance Discussion Papers 1368, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgif:1368
    DOI: 10.17016/IFDP.2023.1368
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    File URL: https://www.federalreserve.gov/econres/ifdp/files/ifdp1368.pdf
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    1. Caby, Jérôme & Ziane, Ydriss & Lamarque, Eric, 2020. "The determinants of voluntary climate change disclosure commitment and quality in the banking industry," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    2. Moreno, Angel-Ivan & Caminero, Teresa, 2022. "Application of text mining to the analysis of climate-related disclosures," International Review of Financial Analysis, Elsevier, vol. 83(C).
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    Cited by:

    1. Wilhelm, Maike & Aydemir, Ali & Rohde, Clemens, 2023. "German banks on the way to climate neutrality? A review of the situation," Working Papers "Sustainability and Innovation" S07/2023, Fraunhofer Institute for Systems and Innovation Research (ISI).

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    More about this item

    Keywords

    banks; climate finance; environmental reporting; climate change;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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