Investors should positively note that all of the surveyed banks have considered climate change on some level, and that this topic is now firmly on the agenda. However rudimentary, most banks have started carrying out climate-related risk assessments and introduced policies for risk mitigation. It is also encouraging that all of the surveyed banks decided to actively participate in the process and responded to our survey.
However, this survey also shows that there are still some considerable weaknesses in the ways banks have responded to climate change. It will be a concern to investors that individual banks’ exposures to climate-related risks are not yet fully quantifiable, and that policies covering the sectors most exposed to those risks, as well as engagement strategies with clients, are in most cases misaligned with the target of limiting global temperature rises to <2°C. Nevertheless, the fact that all banks have started considering climate change indicates that there is a willingness in the sector to address climate-related issue. Hence, 2018 appears to be a good moment for shareholders to engage in climate-related discussions with banks.