Banking and Finance
Financial institutions are the backbone of the global economy, providing capital for innovation, infrastructure, job creation and overall prosperity. But banks also play an integral role in society, affecting not only spending by individual consumers, but also the creation and growth of entire new industries.
As climate change, water scarcity, pressures on natural resources and other sustainability issues take stronger hold, the financial services sector will play a vital role in transitioning to a truly sustainable global economy. With their financial influence, banks can help dramatically reduce U.S. and global greenhouse gas emissions, curb our reliance on fossil fuels and protect ever-tightening water supplies by integrating environmental and social criteria into their lending, financing and investment decision making. It is particularly important that banks consider the financial risk implications of continued investment in carbon-intensive technologies as well as the opportunities of creating a clean energy economy.
A few financial institutions are beginning to look more carefully at high-carbon projects like coal-fired power plants and mountaintop-removal coal extraction, and are increasing financing for alternative energy projects like wind and solar facilities. Despite the positive momentum, few financial firms have board-level policies in place to manage climate and other sustainability risks and even fewer have specific targets for reducing carbon emissions in their lending portfolios.
Banking and Finance Initiatives
Financial institutions have many opportunities to improve the environmental and social impacts of their products and portfolios and reduce risk. Ceres is a trusted partner in helping companies to identify these risks and opportunities.
Ceres, working with our coalition of investors and advocacy groups, engages with a number of financial services firms including Bank of America, State Street, Wells Fargo, JP Morgan Chase and Citi to help them assess their performance on environmental and social impacts and risks, and identify opportunities for improvement. These processes aim to raise the priority of sustainability issues within the company, integrate sustainability in strategy and decision making across the firm, and enhance disclosure in sustainability reports and other forums.
Ceres is also working with financial institutions to elevate climate change, water scarcity and other sustainability issues as a governance priority for board members, CEOs and senior executives in order to better manage financial risks and seize lending and investment opportunities that will aid in the transition to a clean and sustainable economy.
In the video below, Mary O'Malley, VP of Environment Sustainability at Prudential, a Ceres Company Network member, talks about the progress that Prudential is making on sustainable governance.
Reports and Education
Ceres releases cutting-edge reports about the risks and opportunities posed by climate change, water scarcity and other sustainability issues, including what companies, investors and industries are doing to mitigate those risks and capitalize on new opportunities.
Our reports help inform banks and financial institutions about the material risks of the activities they finance, such as oil sands extraction, coal-fired power generation and other carbon intensive projects.
|In 2014, in conjunction with Gaining Ground: Corporate Progress on the Ceres Roadmap for Sustainability, Ceres released a Financial Services Sector Report analyzing how well U.S. financial institutions are doing to integrate sustainability into their business practices.|
For more information
To learn more about how Ceres is working with banks and other financial institutions or to get more involved, contact Veena Ramani, Corporate Program Director.