This page provides highlights of our benchmarking of the climate-related disclosures included in the 2021 annual reports and other standalone reports of 35 major, global banks. We have also benchmarked how banks' disclosures align with the recommended disclosures of the Task Force on Climate-related Disclosures (TCFD).
There are three key areas where banks disclose information on climate-related metrics and targets in their annual reports:
- financed emissions
- green or sustainable financing; and
- operational emissions.
Common targets that banks disclose in these three areas are:
- to reduce financed emissions to net zero by 2050 (or earlier);
- to provide a committed amount of green or sustainable financing by 2030 (or an earlier date); and
- to reduce operational emissions to net zero by 2030 (or earlier).
What is disclosed in the banks’ annual reports?
80 per cent of the banks disclose information on their climate-related metrics and targets in the annual reports. The nature and extent of information disclosed varies significantly between the banks in our analysis.
One area which is still vague in the annual reports of all banks is ‘financed emissions’. At the same time, calculating financed emissions is complex, particularly when there is no universally accepted methodology for measuring these.
A minority of banks in our analysis provide more detailed disclosures. These banks generally disclose the following information to the users of the annual reports.
- More information on financed emissions – such as the methodology that the bank is using (or intends to use) and quantitative details of financed emissions (or preliminary numbers) of at least certain sectors.
- Sector specific targets for carbon-intensive sectors – in particular, those sectors related to fossil fuels.
However, many banks provide less detailed disclosure or no disclosure on climate-related metrics and targets in the annual report.
How does banks’ reporting align to the TCFD recommended disclosures?
Financed emissions refer to the greenhouse gas emissions associated with a bank’s lending and investment activities. This is one of the most important metrics for measuring the climate-related impacts of banks. However, financed emissions are not widely quantified and disclosed at this stage, and this is an area where there is more work to be done on the disclosures by most banks. There is no universally accepted single methodology for calculating financed emissions yet, this makes it challenging for banks to calculate and disclose their emissions.
Until banks quantify all their metrics, refine all their targets, and track and disclose their progress against these targets, it is difficult for users to fully understand and assess the extent of progress against their net-zero targets – particularly for financed emissions.
Find out more - Read our analysis
Read our benchmarking analysis on how banks reported on climate-related matters in the 2021 reporting season. The reports include the scope and approach of our analysis. See phase 1 on how we have assessed the disclosures as ‘more detailed’, ‘less detailed’ or ‘no disclosures’ provided and phase 2 for the maturity scale we used to assess banks’ climate-related disclosures.
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