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, banks will play a vital role in transitioning to a truly sustainable global economy. With nearly $6 trillion in market capitalization, the financial services sector 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

Ceres works with banks and other financial institutions to provide better disclosure about the financial and material risks of products they provide to business and consumers including the projects they choose to fund, how they are reducing the carbon footprint of their lending and how they are increasing financing of of technology such as energy efficiency projects and renewable energy ventures to help transition us to a more sustainable global economy.

Disclosure and Governance

Ceres, working with our coalition of investors and advocacy groups, engages with a number of financial services firms including Bank of America, State Street and Citi to help them identify and assess their performance on their priority 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.

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 2008, Ceres released the report Corporate Governance and Climate Change: The Banking Sector, which ranks dozens of banks and financial institutions on their strategies for responding to climate change.

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 Manager.