Banks are connected to every part of the economy through their investing and lending activities. That means they play a crucial role in financing the transition to a low-carbon economy. The financial sector is increasingly aware of the need to shift capital flows away from companies and activities that contribute to the climate problem and into climate solutions.
The SRI Conference on Sustainable, Responsible, Impact Investing will take place in San Diego, CA.
The world is already transitioning to a low-carbon economy. Financial institutions have the power to expedite and smooth the transition by limiting their contribution to the climate problem and growing their contribution to the climate solution. The Portfolio Carbon Initiative, a partnership with Sustainable Finance Observatory (formerly 2 Degrees Investing Initiative) and UNEP Finance Initiative (UNEP FI), develops a series of resources to guide financial institutions in assessing the climate impact of their activities and carbon asset risk.
This initiative was previously called the Financed Emissions Initiative.
When the 2011 Newsweek Green Rankings were published, it came as a surprise to many that seven of the worst performing US companies were financial firms. The reason for such a poor performance was inadequate reporting of emissions in corporate supply chains; in the case of financial firms, emissions from their lending and investment portfolios.
On its own, the global financial sector has a limited carbon footprint -- compared with manufacturing, mining and construction, for example, it barely registers at all. Yet each of those "heavy" industries is backed by the resources of banks and financial institutions, and those monetary relationships tie financiers, to a degree at least, to the emissions they capitalize.
