(Amsterdam, 15/10/2021)-. On the eve of the next UN Conference on Climate Change in Glasgow (COP26), the Global Alliance for Banking on Values (GABV) is calling on the financial sector as a whole to act faster, go further, and be more coherent. This also includes values-based banks. Although, they are more ambitious, intentional, and coherent in addressing climate change than their mainstream counterparts, they recognize that more needs to be done.
According to the GABV, there is an increasing consensus about the critical role finance must play to address climate change. Yet commitments to act across the financial sector while growing are not universal and where they do exist, there remains a profound disconnect between commitments and action.
“Enormous quantities of finance continue to flow to unsustainable activities. This must stop. Without financial institutions playing their part, addressing both environmental challenges and their consequences for people and ecosystems, we will not be possible”, says Martin Rohner, Executive Director of the GABV.
The current discussion about climate finance is too narrowly focused on mitigation and risk management, states the GABV in its Position Paper on Climate Change.
“The starting point for our position on climate change is our vision that finance is here to serve people and planet, not the other way around. We aim for a holistic understanding of the impact of climate change upon our clients and communities and how we can help them transform and adapt,” explains the Executive Director of the GABV.
GABV members have different levels of climate readiness. Some are far advanced and have taken very ambitious commitments towards developing net-zero loan and investment portfolios. Others, while aware of the importance of the topic, are only starting to understand how they will be impacted and what this means for their work. As frontrunners in sustainable finance with a strong ambition to tackle climate change, many values-based banks are already implementing a comprehensive set of measures that include:
- Avoiding harmful projects and activities, such as fossil fuels and other greenhouse gas-intensive industries.
- Enabling innovative projects and activities that help mitigate climate change or even sequester carbon.
- Sensitising their clients and helping them transform or adapt to climate change, by providing capital, finance, know-how, and resources.
- Advocating for change in the framework conditions so that they better reflect the true price of climate change and send the right signals to markets.
- Establishing transparency by measuring and publishing greenhouse gas emissions.
- Committing to reduce their greenhouse gas emissions in line with the Paris Agreement or even faster.