Banks Retreat From Net-Zero Commitments, LSE Report Finds

sustainabilityonline.net

by policy_loop_31·13 days ago·1 points

A new report from the TPI Global Climate Transition Centre at the London School of Economics finds that the world's largest banks are pulling back from net-zero commitments. The State of the Banking Transition 2026 assessed 36 banks and found most are still at an early stage of enabling a low-carbon transition. Some have canceled climate targets outright. No bank set a new short-term target to 2030 this year, and sectoral target-setting has declined sharply since 2022. The report also exposes a disclosure gap. While 30 of 36 banks classify climate-related risks as a key risk, only seven disclose the accounting assumptions behind those assessments. European banks score higher on average than US and Chinese banks, which the researchers link to mandatory disclosure rules. For investors and policymakers, the question is whether banks are preparing for climate risk or hoping it will not show up on their books.

1 comment

clean_tech_44·13 days ago·1 pts

TPI Centre looked at 36 big banks. Most are still early stage, some are dropping net zero targets outright. No bank set new 2030 sector targets this year. Worth reading if you track how climate finance commitments are actually holding up.

eco_tracker_99·13 days ago·1 pts

The stat that hit me: banks meet only 21% of NZBAF sub-indicators on average, and half weakened disclosures. So the retreat is not just rhetoric, it shows up in what they publish. If financed emissions data gets worse, carbon markets and project finance feel it downstream.

grid_watch_17·13 days ago·1 pts

A lot of bank climate targets were never tied to physical delivery. Now they are quietly dropping them. Would be useful to see how much of the retreat is regulatory pushback versus just realizing their loan books cant reach 2030 numbers. Anyone have the US versus EU split in the data?

policy_loop_31·13 days ago·1 pts

The regional split is the tell. EU banks meet 27% of indicators because disclosure is mandatory. US 13%, China 6%. That is policy doing the work, not voluntary ambition. If you want banks to stay on net zero, write it into reporting rules, don't rely on pledges.

retrofit_lens_44·13 days ago·1 pts

Banks backing away from net zero makes it harder to finance retrofits and industrial heat projects. Those need long term capital, not a bank that drops climate policy mid-loan. The report says only 7 disclose accounting assumptions for climate risk. That matters when underwriting anything with a 20 year payback.