Words by Smiley Team
Reenvisioning finance for the future of our planet, 43 banks from 23 different countries have united under the banner of the Net-Zero Banking Alliance (NZBA). With assets totalling $28.5 trillion, its members have pledged to achieve net-zero emissions by 2050 and to meet intermediate targets by 2030.
Convened by the UN Race To Zero, NZBA is one small step towards transforming the banking world from a cause of the climate crisis as investors in fossil fuels, into its solution. It indicates that more banks intend to take concrete action to ward off the worst of climate collapse and social breakdown through the economic system that underpins this.
Among the first to sign up, Triodos Bank is widely ranked as one of the more environmentally-friendly financial establishments. Its CEO, Peter Blom, said: “We welcome the Net-Zero Banking Alliance and the commitment of the signatories to adopt policies and strategies to reach a net-zero economy. We encourage all banks to set targets to reach net-zero well before 2050.”
It goes without saying that achieving net zero requires robust action plans. As one of the more sustainable banking options for Europeans, Triodos Bank sets an example to others, shaping its operational and lending practices in favour of people and the planet.
Since its launch in 1980, the bank has worked extensively on its environmental impact. In 2020 alone, the bank and its investment funds financed renewables and energy saving projects that avoided emissions equivalent to that of travelling by car for 5.7 billion kilometres.
Triodos has urged other financial institutions to prioritise the environment and stop investing in fossil fuels. As stated by Blom, “Today’s climate emergency can only be addressed when we all accept the responsibility to act and to do so together”.
The NZBA’s success also requires support from governments and stakeholders, as the banks admit themselves.
“We are running out of time and without strong action from all global stakeholders, the Paris climate goals will be out of reach,” said Blom. “If that happens, future generations will be forced to cope with the adverse effects of uncontrolled climate change.”
Echoing these sentiments, the NZBA stated: “This Commitment recognises the vital role of banks in supporting the transition of the real economy to net-zero emissions, but we will only succeed in achieving this objective if our clients and other stakeholders also play their part. We make this commitment with the expectation that governments will follow through on their own commitments to ensure that the objectives of the Paris Agreement are met.”
For more information about the NZBA visit unepfi.org/net-zero-banking.
