Requirements in high-carbon sectors on both transition and physical risk; and risk assessment is not necessarily leading to new financing or investing exclusions or restrictions. One striking gap is the low adoption rate of deforestation policies that move beyond palm oil, even in advanced markets like Europe. We have seen a greater willingness to engage in public policy and to work collaboratively on tools and knowledge-sharing, but this has not led to the transformative shift needed in the financial sector to meet the goals of the Paris Accord.
How can banking professionals effectivel
Demand higher standards from their high-carbon sector clients? They must be willing to engage their clients on TCFD and transition plans, and in Vietnam Telegram Number Data some cases walk away if they are not responsive. There are also some practice decisions that can be made about exiting or transitioning out of some fossil fuels like coal and oil sands. Only half of the banks surveyed engage high-carbon sector clients on TCFD and transition plans. We also saw a big gap in addressing clients that are contributing to deforestation. More focus is needed on deforestation, and embracing zero-deforestation and certification schemes for soft commodity clients beyond palm oil.
Any successful examples of getting
High carbon sector clients to change? In 2014 HSBC decided to only finance customers that were already partly certified under the Roundtable on Sustainable Palm Oil (RSPO) and that aimed to complete certification by the end of 2018. Customers USA Telegram Number were also required to provide evidence of independent verification of their NDPE policies. As a result of HSBC’s engagement, a number of clients introduced NDPE policies. Those that did not will see their relationship with HSBC discontinued once existing loans are paid. Where do you see green banking headed? In large part due to the UK and EU green and sustainable taxonomies, I think we will see more clarity on the definition of green and sustainable finance commitments, more robust implementation of targets and metrics, and more standard and robust certification. I hope this leads to more “net-new” green and clean financing contributing to the low carbon transition.
