Investors call on banking giants to step up on climate and biodiversity commitments

More than 100 investors, including the likes of Aviva and M&G Investments, representing $4.2trn in assets under management have written to some of the world’s biggest banks, calling on them to strengthen climate and biodiversity targets this year.

Convened through the ShareAction coalition, 115 investors have written to 63 leading banks, including JPMorgan Chase, Deutsche Bank and Standard Chartered, calling on them to beef up environmental commitments ahead of key summits this year.

ShareAction is calling upon the 63 banks to strengthen biodiversity targets ahead of the Convention on Biological Diversity’s (CBD) COP15 summit in Kunming this October and the UN’s COP26 climate talks in Glasgow the following month.

Many of the banks to have been sent letters have agreed to voluntary climate targets through initiatives such as the Net-Zero Banking Alliance (NZBA) and the Collective Commitment to Climate Action (CCCA).

NZBA signatories have pledged to set their first climate targets by the end of 2022, but ShareAction investors are calling for banks to publish short-term climate targets covering all relevant financial services ahead of AGMs taking place next year.

ShareAction also claims their recommendations are more ambitious than these voluntary frameworks. The investors are calling on banks to phase out from financing coal by 2030 in OECD countries and by 2040 in non-OECD countries at the latest. Commitments to stop financing companies with coal expansions in place should also be made ahead of COP26, according to ShareAction.

The 62 banks have also been asked to align plans with the International Energy Agency’s (IEA) net-zero scenarios or pathways that are in alignment with the Paris Agreement and with minimal reliance on negative emission technologies.

Ahead of the CBD COP15 conference in October, banks have also been asked to set or update public biodiversity strategies that include commitments to identify and disclose impacts and dependencies on biodiversity and to set science-based nature targets by 2024 at the latest.

ShareAction’s senior campaign manager Jeanne Martin said: “Leading investors have today called on global banks, including those that have already signed up to the NZBA, to up the ante of their climate and biodiversity strategies ahead of COP26. The message from investors is clear: distant net-zero targets and warm words about the importance of biodiversity are not enough. Investors want concrete action now, and those banks which fail to respond can expect serious challenges at their next AGMs.”

The letters request a response by 15 August, with respondents asked to outline the steps they will take to tackle both the climate crisis and biodiversity breakdown.

The letter was sent as 41 leading asset managers, representing $6.8trn, joined the NZBA. Firms such as Amundi, Sumitomo Mitsui Trust Asset Management, Franklin Templeton, MFS Investment Management, HSBC Asset Management and the International Business of Federated Hermes all joined the initiative on Tuesday (6 July).

The additional signatories mean a total 128 investors, collectively managing $43trn in assets, are now part of the initiative.

The Institutional Investors Group on Climate Change’s chief executive Stephanie Pfeifer commented:  “In just six months nearly half of the global asset management sector has committed to achieving net-zero emissions with their clients across the funds they manage.

“This marks a fundamental tipping point across the investment sector and a significant boost in efforts to tackle climate change and decarbonise the global economy. There’s a lot more to achieve, but the sector is increasingly on a path to a net-zero future.”

Join the conversation at edie’s Sustainable Investment conference 

edie’s Sustainable Investment Conference is returning in a virtual format for the second consecutive year on 13-14 July, with hundreds of professionals already registered to attend. 

The conference will unite sustainability professionals from businesses and financial experts from investors to discuss the array of challenges and opportunities that embracing the green recovery can bring. Experts from the likes of BlackRock, UKSIF, UBS Asset Management, CDP and WWF feature on the event’s high-level speaker list. 

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Matt Mace