Share Action

December 2022

In Debt to the Planet

Europe’s largest banks are not doing enough to address the twin crises of climate change and biodiversity loss.


In this report, we assess and rank Europe’s 25 largest banks on their approach to climate and biodiversity, provide leading practice examples, and conclude with a list of recommendations.

It will not be possible to address the interconnected sustainability crises that we face without action in the banking sector. So far, scrutiny of the banking sector’s sustainability credentials has mostly focused on the climate crisis – with good reason. Banks have made some efforts to respond to rising expectations from regulators, investors, and civil society – but we find that they are resisting implementing ambitious climate policies across their business. They are also largely unprepared to face another severe global risk: biodiversity loss. Banks are exposed to financial risks from biodiversity loss, but they are also driving it. Central banks, lawmakers, and investors have already confirmed that biodiversity risks fall within their mandates – and the outcomes of COP15 are due to alter their expectations further.

It is in this context that we have surveyed, scored, and ranked Europe’s 25 largest banks on their approach to climate and biodiversity. Find out more about our questionnaire and our methodology.

Our report shows that:

1. Europe’s largest banks are not doing enough to address the twin crises of climate change and biodiversity loss.

We found significant gaps in banks’ climate and biodiversity strategies, which pose real risks to our planet and everyone on it. The average overall score achieved in this survey is 43.7 per cent and 19 banks did not even score half of the available points. There were some particularly low scores on biodiversity, with six banks scoring 20 per cent or less, and three scoring less than 15 per cent. While some banks demonstrate leading practice on some topics, no bank demonstrates leading practice across all areas: the highest score was just 63 per cent. In many cases, the leading practices in the sector continue to fail basic litmus tests on climate and biodiversity.

Table 1: Ranking of Europe’s 25 largest banks based on their performance on key climate and biodiversity metrics.

2. All of Europe’s largest 25 banks have now committed to net-zero by 2050 at the latest, and more than 80% of them have set at least one sectoral target.

However, the quality and scope of these targets vary widely.

When we last surveyed European banks, none of them had committed to net-zero by 2050 at the latest. Now all 25 surveyed banks have. However, only six banks back these long-term ambitions with interim commitments to cut emissions across financing activities (‘overarching targets’).

Twenty-one banks have set at least one sectoral target to support their longer-term ambition. This is a net improvement from our last survey, when no bank had set targets to reduce their exposure to carbon-related assets.

Banks prioritised setting sector targets for oil & gas and power generation, and at least one segment of the transport sector (automotive, aviation, rail, shipping). However, only one bank published a target for agriculture and no bank has covered the chemicals sector, despite its serious ecological impacts.

Most banks are using 1.5C aligned scenarios but the level of ambition varies across sectors – availability of suitable scenarios is also an issue

Concerningly, most targets are intensity-based – including 20 per cent of oil & gas targets set - despite the need to cut absolute emissions. Furthermore, only one bank covers capital markets activities in their targets, despite these representing the bulk of European banks’ financing of top oil & gas expanders.

Table 3: Comparison of net-zero targets set by Europe’s largest 25 banks.

3. Banks’ fossil fuel policies are also not strong enough to align their financing with 1.5C pathways.

Sector policies are the key lever banks have to influence the real economy. They determine what activities and/or companies banks will or will not finance, and under what conditions.

Banks have strengthened their fossil fuel policies since our last survey. For example, more than three quarters of banks have now committed to a timebound coal phase out – compared to half in December 2019.

However, we find that banks’ fossil fuel policies are riddled with loopholes. The average fossil fuel policy scored 43 per cent and even on coal, the most polluting fossil fuel, the average score was only just over 50 per cent.

While all banks now restrict financing to companies reliant on thermal coal and the number of banks restricting financing to coal expanders continues to rise, these restrictions continue to be tailored to clients rather than the climate.

[For more information, see Tables 4 and 5 in full report.]

Banks’ oil & gas policies are now firmly in the spotlight. The number of banks announcing asset finance restrictions on new oil & gas fields has doubled in eight months – and new announcements keep coming. These new commitments send a strong signal to the market that European banks are losing their appetite for financing new oil & gas. However, only three surveyed banks have specific financing restrictions for companies expanding oil & gas regardless of supply segment. Only four require transition plans from oil & gas clients as a condition of financing – and only one specifies what these must include. We are concerned that only a handful of banks restrict financing for new oil & gas at the corporate level as asset finance only makes up eight per cent of the financing provided by European banks to top oil & gas expanders.

Table 6: Comparison of the oil & gas policies of Europe’s largest 25 banks (general oil & gas expansion)

Unconventional oil & gas activities carry higher environmental and financial costs and are often more carbon- and methane-intensive than conventional oil & gas production. We found most banks have asset level financing restrictions in place for unconventional oil and gas – but many fail to back these with financing restrictions at the corporate level and only four banks have committed to phase out any unconventional oil & gas segments. Like coal, banks’ oil & gas policies have clear loopholes and gaps which appear tailored to existing client bases.

Table 6: Comparison of the oil & gas policies of Europe’s largest 25 banks (unconventional oil & gas)
Many banks now restrict asset finance to some segments of unconventional oil & gas.

4. 24 banks have a green finance target – but a lack of scrutiny, transparency, and consistency in how these targets are set opens the door to greenwashing.

Twenty-four of Europe’s 25 largest banks have now set a green finance target, up from 70 per cent of banks in December 2019. However, the lack of scrutiny on green finance transactions can open the door to greenwashing. Most banks’ green finance transactions are not externally audited – a concerning trend, given that most banks provide green financing to clients that would otherwise by excluded by their sector policies.

There is also no clear consensus among the surveyed banks on which sectors should count towards their green finance targets, little consistency in how they report on green finance activities, and disclosures are often opaque.

Seventeen banks grant green financing to clients that would otherwise be excluded by their climate risk management frameworks and 10 of these do so with no strings attached

5. Banks are only waking up to the biodiversity crisis: we find that they are performing significantly worse on biodiversity than on climate.

Banks’ average performance on biodiversity is lagging behind climate in all aspects: the mean score was 35 per cent for biodiversity compared to 48 per cent for climate. For some banks, the gap between the two issues is even larger. The questions in our survey were necessarily less detailed for biodiversity, and therefore the progress needed by banks on this topic is likely to be even greater than our scores imply.

Banks’ average scores are higher for climate than biodiversity in each section of the survey

6. Banks’ biodiversity strategies are limited in scope and ambition.

While 16 banks have some form of strategy to identify and manage biodiversity impacts and dependencies, these tend to lack detail and be limited in their scope and ambition. For example:

  • Biodiversity is frequently not considered in banks’ assessments of risk for clients and transactions, or is based on very limited information.
  • Only three banks have set any targets to manage biodiversity-related risks, and two of these are limited to very specific activities and areas.
  • Most banks do not integrate biodiversity criteria in sector policies on a systematic basis, and most biodiversity restrictions focus on projects, not companies.

Banks commonly cite a lack of biodiversity data as preventing them from taking more thorough action to tackle biodiversity loss. However, we find that very few banks are using data and tools that are available now. For example, only a handful of banks use location and supply chain tools - such as the Integrated Biodiversity Assessment Tool (IBAT) - despite these sometimes providing access to unique global biodiversity datasets. Without these data, it is difficult to see how banks can properly assess the environmental impacts of the projects they finance – as is advocated by the Equator Principles.

Most banks aren’t using enough tools to assess biodiversity risks, opportunities, impacts and dependencies


The scale and urgency of the climate and biodiversity crises demand that banks demonstrate – and even exceed – leading practice on all the issues highlighted in this report. While some banks demonstrate leading practice in specific areas, no bank demonstrates leading practice across all assessed policies and activities. We urge banks to implement our recommendations across the board, which can be found in the full report.

We recommend that banks:

  • Tackle the twin crises of climate change and biodiversity loss together, and with the same urgency.
  • Explicitly commit to the principle of free, prior, and informed consent (FPIC) for Indigenous peoples and affected communities. Reflect this commitment in sector policies, such as by excluding projects and clients that violate FPIC.
  • Commit to a just transition and publish a plan of action to that effect.
  • Report on their progress in annual reports.

We have written to the CEOs of each of the banks with a set of tailored recommendations about how they can close loopholes in their climate and biodiversity strategies. You can read them here.