October 22, 2015 / 3:17 PM / 4 years ago

World's top banks ill-prepared for climate risk - industry report

LONDON, Oct 22 (Reuters) - The world's biggest banks are
ill-prepared for the effects of climate change and lenders are
making insufficient effort to fund a transition to a low-carbon
economy, an industry report said on Thursday.
    Of the world's 10 largest banks, only Bank of China
 and Citigroup were among the top 10 ranked for
climate management in a report by investment manager Boston
Common Asset Management. 
    A major criticism of the banks surveyed was that many fail
to assess adequately the climate change risk to their portfolios
and no bank currently measures its carbon footprint. 
    "Banks are tied to every market sector through their lending
practices, making them uniquely vulnerable to climate-related
risk," Boston Common said.  
    "We believe banks are not adequately measuring, managing and
disclosing these risks." 
    Governments around the world are preparing for the United
Nations COP21 climate change summit in December, which aims to 
agree a deal to curb global greenhouse gas emissions.
    A global transition to a low-carbon economy will cost around
$4.8 trillion, according to estimates given by 55 countries to
the U.N. ahead of COP21.
    Banks have a critical role to play in funding this
transition, but most lenders assessed do not have quantitative
targets for increased financing of energy efficiency or
renewable energy projects, the report said.
    The top 10 banks as ranked by Boston Common according to
their performance in risk management, climate change strategy
and opportunities were:    
 Rank  Bank                                       Country 
 1     Westpac Banking Corporation                Australia 
 2     National Australia Bank Limited            Australia 
 3     Toronto-Dominion (TD) Bank                 Canada 
 4     Banco Bilbao Vizcaya Argentaria (BBVA) SA  Spain 
 5     Citigroup Inc                              U.S. 
 6     Bank of China                              China 
 7     UBS AG                                     Switzerland 
 8     PNC Financial                              U.S. 
 9     DNB ASA                                    Norway 
 10    Itaú Unibanco                              Brazil 

 (Reporting by Lisa Barrington; Editing by Dale Hudson)
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