Bank climate group to report capital markets related emissions

By Simon Jessop, Virginia Furness and Ross Kerber

LONDON / BOSTON (Reuters) -A U.N.-backed banking climate coalition on Wednesday released updated guidance for members requiring them to disclose more about how they plan to cut carbon emissions, including from their capital markets activities.

The Net-Zero Banking Alliance (NZBA), whose 143 members oversee $74 trillion in capital, said the guidelines will also require data disclosure on transition planning and climate-related advocacy by the banks.

The guidelines, which confirm a story first reported by Reuters, maintain the coalition's ambitions in the face of a tough political backdrop, the group said. Some U.S. politicians have been the most vocal in their criticism, citing anti-trust concerns.

"We are still here at the table, we are not watering down, we are expanding the scope, doubling down on 1.5 degrees and not moving away from that," said Remco Fischer, head of climate at the U.N. Environment Programme Finance Initiative, which acts as the secretariat for the NZBA.

The 2015 United Nations Paris Agreement commits countries to limit the global average temperature rise to well below 2 degrees Celsius above pre-industrial levels and to aim for 1.5 C (2.7 degrees Fahrenheit), a level that, if crossed, could bring far more severe climate change effects, scientists say.

The latest guidelines highlight that each bank should act independently, given the antitrust backlash, but they also refer to a global plan to shift from fossil fuels, something that has also prompted political push-back in Europe.

The guidelines require banks to report capital markets emissions, such as those tied to money raised for companies via bond or share issues. They will also have to disclose the coverage of each of their emission reduction targets as a percentage of their exposure.

Sarah Kemmitt, who heads up the NZBA secretariat, said legal advice meant they were confident there was no case to answer in reference to criticism of banks' membership of climate-related coalitions.

"We have obtained a legal view... we think we are on very safe ground as regards to antitrust."

Netherlands-based Triodos Bank said it had voted against the new guidelines as it did not believe they were strict enough, but would remain in the group.

"The updated guidelines are not strict enough and provide banks with too much leeway," said Jacco Minnaar, chief commercial officer at Triodos Bank. "We do see the guidelines improved compared to the first proposal, partly answering our criticism."

Among top U.S. banks that participate in the NZBA, Bank of America, Citi, JPMorgan and Wells Fargo all declined Reuters requests for comment.

Ivan Frishberg, chief sustainability officer at labor-affiliated Amalgamated Bank, said the new capital markets guidance was "incredibly significant" since among other things it defines what disclosures banks should make about their plans for reducing emissions.

West Virginia State Treasurer Riley Moore, among the U.S. Republicans who have criticised banks for paying too much attention to environmental considerations, said the new guidance conflicted with banks' fiduciary duties and represented an attempt to cut off capital from coal, oil and natural gas.

In a statement sent by a representative, Moore said U.S. banks and financial institutions should withdraw from the NZBA and similar organizations "and reject these attempts to impose globalist climate policies on the American banking system.”

(Reporting by Simon Jessop and Virginia Furness in London and by Ross Kerber in Boston. Additional reporting by Isla Binnie in New York. Editing by Barbara Lewis and Jane Merriman.)