Environmental sustainability addressed in the first progress report of the United Nations principles for responsible banking(2021).

 

The first collective progress report of the UN Principles for Responsible Banking signatories shows how signatories are building foundations to transform sustainable banking, establishing systems and policies in order to set targets. A report from 87 banks shows US$ 2.3 trillion is being mobilized as a sustainable finance whose key significant impact areas are climate change mitigation and climate adaptation.

Nearly 75% of banks indicated climate change mitigation as their area of most significant impact. They have developed financial products supporting a reduction of GHG emissions, including green loans, green bonds, and green mortgages. 78% of these banks are working with clients to support them in transitioning towards a low-carbon economy or are setting up an engagement process to do so.

Climate change adaptation is particularly important in many developing countries. 63% of banks are analysing the physical risks associated with sectors in their portfolios. 8% of banks report having analysed all sectors for physical risk vulnerability, while more than half have conducted or are in the process of conducting a scenario-based physical risk assessment of all sectors. Mortgage and (commercial) real estate are the most frequent fully assessed sectors, followed by power generation, agriculture and transportation. As a company increases its degree of adaptation, the exposure of the lender to climate risk is reduced. 14% of banks have started an engagement process with their clients on climate adaptation.