Welcome to the Reuters.com BETA. Read our Editor's note on how we're helping professionals make smart decisions.
Skip to main content

Breakingviews

Bank investors are at the vanguard of climate push

3 minute read

Buildings are seen in the Canary Wharf business district in London, Britain, October 20, 2020. REUTERS/Matthew Childs

LONDON, July 7 (Reuters Breakingviews) - Shareholders, not regulators, are making the loudest noises on climate change. A group of investors with $4.2 trillion of assets under management have written to lenders including JPMorgan (JPM.N), HSBC (HSBA.L), (0005.HK) and Deutsche Bank (DBKGn.DE). Organised by campaign group ShareAction, they’re advocating quicker steps to align banks’ loan books with the goal of keeping global temperature increases below 1.5 degrees Celsius compared with pre-industrial levels, including cutting back on funding coal projects. Compare that with supervisors like the Bank of England and European Central Bank, who are slowly conducting “green stress tests” that won’t initially feed into regulatory capital requirements.

The investor push is necessary. Different companies have varying definitions read more of what’s meant by “Paris-aligned” and “net zero”. A concerted shareholder effort can unify them. And there’s a precedent for bank investors forcing chief executives into action: after the financial crisis, shareholders demanded that lenders hit new capital targets quickly even though regulators gave them years. (By Liam Proud)

On Twitter http://twitter.com/breakingviews

Capital Calls - More concise insights on global finance:

Nomura extends prime broker woes read more

Weibo take-private talk stirs Sina holdouts read more

JEDI’s lesson on best laid plans read more

Toyota benefits from doubly weird auto market read more

Teneo calls its own experience read more

Editing by Neil Unmack and Oliver Taslic

Breakingviews
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

More from Reuters