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Green Ambitions, Grey Realities: European Banks’ journey from pledges to practice


Our major new investigation into Europe’s largest 20 banks reveals that while banks are actively promoting their green finance credentials, there is a widespread lack of transparency around their green finance activity. This leaves all 20 banks open to allegations of greenwashing. 

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.
Many green finance targets cover products and services that are not related to financing

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 don’t always disclose what activities count as ‘green’ or ‘transition’, and those that do consider controversial activities such as biomass for power generation eligible for green financing
Many green finance targets combine climate with broader sustainability themes, and only six banks have set targets at sector level
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.
Double Standards: Barclays applies a 33% weighting to its pro-rata share of facilitated carbon emissions, but an 100% weighting to its pro-rata share of green finance transactions.
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.