News Column

"Financing Climate Change: Carbon Risk in the Banking Sector"

August 2, 2014



By a News Reporter-Staff News Editor at Business & Finance Week -- Investors may unwittingly be investing in financial institutions that will be adversely impacted by the effects of climate change. The banking industry has not successfully integrated climate change risk into its long-term strategic planning, or understood the implications of this game-changing phenomenon for its business operations.

In a new report "Financing Climate Change: Carbon Risk in the Banking Sector" Boston Common Asset Management calls on investors to push for systemic change in the banking industry to address climate change risks.

"Banks are connected to every market sector, making them uniquely vulnerable to the economic and political uncertainty caused by climate change. Since banks are not required to disclose climate risks, investors simply cannot see the potential risks buried in their portfolios," says Geeta Aiyer, president of Boston Common Asset Management. "The time to act is now."

For nearly two decades, the Boston Common Asset Management team has engaged the global financial industry including regional development banks, the International Finance Corporation (IFC), and the World Bank, to proactively address the environmental and social risks associated with project financing, lending, and investments. This includes Barclays, Deutsche Bank, HSBC, JPMorgan Chase, Mitsubishi UFG, ORIX, PNC Financial, and Standard Chartered.

Investors are advised to identify best practices and seek out the banks that use them while encouraging the development of strategic management plans to address climate change risk, capture new market opportunities, and increase data collection and reporting. "Shareholders should urge banks to be more transparent about the climate risks embedded in their business models, and call for comprehensive action," says Lauren Compere, Director of Shareholder Engagement at Boston Common Asset Management.

Keywords for this news article include: Banking and Finance, Boston Common Asset Management, Climate Change, Global Warming, Investment and Finance.

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Source: Business & Finance Week


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