{"id":32849,"date":"2021-08-26T12:50:51","date_gmt":"2021-08-26T16:50:51","guid":{"rendered":"https:\/\/test.greenmoney.com\/2025\/?p=32849"},"modified":"2021-09-29T18:30:49","modified_gmt":"2021-09-29T22:30:49","slug":"ensuring-planetary-stability-banks-as-unlikely-allies","status":"publish","type":"post","link":"https:\/\/test.greenmoney.com\/2025\/ensuring-planetary-stability-banks-as-unlikely-allies\/","title":{"rendered":"Ensuring Planetary Stability: Banks as Unlikely Allies?"},"content":{"rendered":"
>> Back to September 2021 Issue<\/a><\/div>\n

\"\"Of all the types of institutions playing a role in averting catastrophic climate change, banks are perhaps unlikely protagonists. Yet by the everyday process of allocating capital and issuing loans to clients, lenders can be powerful allies or destructive antagonists in the fight for a just and climate-safe world. Traditionally, banks manage localized financial risks their borrowers might face, but the impact of their lending decisions has significance on the climate, our ecosystems and overall planetary stability.<\/p>\n

At this year\u2019s COP26 conference, the financial sector will be high on the agenda. The Glasgow Financial Alliance for Net Zero (GFANZ<\/a>), chaired by Mark Carney, will convene institutional commitments from across the financial sector including the Net Zero Banking Alliance (NZBA<\/a>) with 43 banks promising to reach net-zero by 2050. That still leaves a lot of the banking sector who have not made those commitments, and even for those who have, criticism<\/a> has been levelled at their lack of near-term action and ongoing investments in fossil fuels.<\/p>\n

The global financial sector is jeopardizing an environmentally sustainable future by facilitating climate change beyond a 1.5 or 2 degrees Celsius temperature rise. Since the Paris Agreement in 2015, the world’s 60 biggest banks funneled USD 3.8 trillion<\/a> into fossil fuel activities, despite many publicly committing to Paris-aligned net-zero targets. None have responded to the IEA<\/a>\u2019s declaration that any expansion or exploration of fossil fuels is incompatible with a 1.5 degree scenario. The largest banks have also bankrolled extinction<\/a>: in 2019 alone, they invested $2.6 trillion into activities that are responsible for the destruction of terrestrial and ocean biodiversity.<\/p>\n

Progress on this systemic problem requires bringing campaigners, stakeholders, and banks together to change the finance system. The Climate Safe Lending (CSL) Network<\/a> is a transatlantic multi-stakeholder collaborative of banks, NGO\u2019s, investors, regulators, experts, and leaders from across the banking system. CSL aims to accelerate the decarbonization of the banking sector to secure a climate-safe world in line with a well-below 1.5C temperature rise. We believe that a cross-sector network approach can harness the collective intelligence of the system to find new and bold solutions, foster new relationships amongst leaders, and mobilize the power of many to ensure that the financial system contributes to a climate-safe future. CSL hosts cross-sector convenings, publishes emerging insights, and houses several key initiatives.<\/p>\n

\"Aligning<\/p>\n

A key pillar of the Network is the Climate Safe Policy Initiative<\/a>, grounded in CSL\u2019s report, Financial Stability in a Planetary Emergency<\/em><\/a>, published by UNEP FI and Climate-KIC. We proposed ten cutting-edge proposals for climate-related financial regulation that could shift financial flows to safeguard planetary (and by extension financial) stability. The proposals were assessed by experts from across the system based on impact and feasibility. They included the creation of a non-proliferation treaty on fossil fuel and deforestation finance, the implementation of a \u2018climate communities reinvestment act\u2019 to redirect capital to communities and ecosystems on the front lines of climate change, and more.<\/p>\n

The Climate Safe Policy Initiative currently focuses on the following key proposals:<\/h2>\n