Most green finance targets don’t demonstrate how banks will align with net-zero by 2050

Most banks include products and services in their green finance targets that are unrelated to financing the transition to a green economy. For example, some targets include finance provided to buy already existing assets or infrastructure.

Banks’ definitions of ‘green finance’ are highly opaque and could be misleading

Many banks do not define what they mean by 'green' finance, and those that do often include carbon-intensive solutions such as natural gas and biomass

Some banks consider controversial activities such as biomass for power generation eligible for green financing.

Banks take full credit for green finance, while undercounting their contribution to climate changing emissions.

When reporting on carbon-related targets and disclosures, banks tend to set narrow and vague targets.

They usually focus on lending and exclude other important sources of financial support. For example, capital markets facilitation can represent the bulk of a bank’s financial support to carbon-intensive industries.

Barclays is the only bank that includes capital markets in its emissions reduction targets. However, it only counts 33 per cent of its share in a deal, whereas it counts 100 per cent of its share in a deal when it counts towards its green finance target.

The opaque nature of banks’ green finance targets makes it impossible to tell whether the 20 banks surveyed are committed to financing a green energy future. The lack of transparency means it is difficult to see how banks are transitioning from investing in fossil fuels to future green energy solutions.