Europe’s 20 largest banks – including Barclays, Lloyds, Santander, HSBC and NatWest – are being urged to step up efforts on sustainable finance as the year comes to a close.
ShareAction, which campaigns for responsible investment, has written to the banks’ chief executives to call on them to set climate targets based in science to show how they are funding sectors crucial for the net-zero transition.
The charity warned the banks that they can expect to see shareholder action next year if they fail to meet investor expectations for greener practices.
It comes after ShareAction recently found that while all 20 banks had set a sector-specific target for decarbonisation and cutting emissions, only nine had set one for sustainable finance – funding for sectors like renewable energy and infrastructure.
Banks were also rarely found to provide a breakdown of how much sustainable financing they would provide to each sector.
Kelly Shields, senior campaign manager at ShareAction, said: “The role that we need Europe’s biggest banks to play in financing our transition to net-zero economies cannot be underestimated.
“Unless banks act now to increase ambition, the finance needed to scale up areas like clean energy and the rollout of green infrastructure will simply not be available.
“Crucially, investors want to see banks set targets grounded in science that clearly show how they will finance the sectors like renewable energy that are critical to transitioning our economies and protecting people from dangerous levels of global heating.
“Banks should heed the warning that shareholders will take action next year if they fail to meet investor expectations of urgent progress on this issue.”
It comes amid growing investor concerns over how banks are approaching sustainable finance, with coalitions recently backing statements at annual general meetings this summer, urging Societe Generale and HSBC to set key targets for transition sectors.
Katharina Lindmeier, head of sustainability strategy at UK workplace pension scheme Nest, said: “We support ShareAction’s call for Europe’s largest banks to set science-based targets, demonstrating how they are funding sectors vital to the net-zero transition.
“By embracing renewable energy and green technologies, banks can contribute to environmental sustainability whilst unlocking new avenues for growth and innovation.
“These sectors will create jobs, drive economic development, and pave the way for a more resilient and sustainable future.”
A spokesperson for NatWest Group said: “In the first nine months of 2024, NatWest Group provided £23.5 billion of Climate and Sustainable Funding and Financing to our customers and we are within sight of reaching our ambition to provide £100 billion between July 1 2021, when this ambition was set, and the end of 2025.
“The Share Action report notes that we are one of only two banks that it has written to with an energy investment supply ratio consistent with net zero by 2050.”
A Santander spokesperson said: “The bank has set sustainable finance and emission reduction targets for 2030 across a range of material emitting sectors, and operates strict policies governing our financing decisions.
“We have been supporting the build-out of renewable energy capacity for decades, but our role is also to work with clients and encourage their transition from brown to green maintaining energy security”.
The PA news agency has contacted Barclays, Lloyds, HSBC and Societe General for comment.
