Despite the growth in responsible investment as reported by
various sustainable investment forums, such as Canada’s Responsible Investment Association, the uptake
of responsible investing in the banking sector leaves much to be desired,
according to an extensive report on banking from RI research firm Sustainalytics.
Only 7% of banks surveyed by Sustainalytics report that the
share of responsible assets is more than 5% of total assets under management.
Nearly all of these institutions are from Europe, with three from North America
and one from South America.
Another 96 institutions (27%) either have less than 5% of
AUM dedicated to RI assets or do not disclose the value of their RI assets. Two
hundred and forty-one institutions (67%) don’t provide any evidence of RI
assets under management.
Further, just 20% of the banks around the world surveyed by
Sustainalytics are PRI signatories. And only 27% have published some kind of
responsible investment policy.
Only 6% of banks live up to Sustainalytics highest
requirements, which include the application of at least two out of three RI
strategies: exclusion, best-in-class and engagement.
“While a number of banks are engaged in RI, the majority of
them are not PRI signatories, do not have RI policies in place and have not
disclosed responsibly management assets,” the report says.
The report notes that the banking industry supports a wide
range of sustainability related products and services, including green consumer
loans, rebates for energy efficient home retrofits, large scale renewable
energy project and green bonds.
In fact, 72% of banks assessed on this indicator have
disclosed programs or activities to promote sustainability-related products and
services, mostly in the form of clean energy financing and consumer loans.
Eleven banks stand out for setting quantitative targets to expand
sustainability financing commitments within a specific time frame.
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