The global financial sector is urged to back up their ‘big words’ with real actions as the climate crisis accelerates.
As an Observer NGO at the COP27 Climate Change Conference in Egypt, the Global Alliance for Banking on Values (GABV) calls upon the financial sector to back up its rhetoric with actions.
This leading global network of values-based banks will mark Banking On Values Day on 10 November 2022 by reaffirming the crucial role that banks have to play in tackling the root causes of climate change.
At the occasion of the COP27 ‘Finance Day’, the GABV urges the financial sector, including values-based banks, to live up to its commitments. At last year’s COP26 Conference in Glasgow, UK, mainstream financial institutions issued welcome public commitments and declarations designed to tackle climate change and help facilitate the move towards net zero.
One year later, many of them continue financing the fossil fuel industry at an industrial scale. A recent report by Finance Watch estimates that 60 of the largest global banks still have around USD 1.35 trillion of exposure to fossil fuel assets.
Martin Rohner, Executive Director, GABV: “Banking is never neutral – institutions make decisions about what they finance and invest in, and these have major impacts on the shape of our collective future. Over recent years, mainstream banks have increasingly positioned themselves around their social purpose and environmental goals. Now, this rhetoric must be backed up by real commitments and action.”
For Banking on Values Day 2022 on 10 November, the GABV and its members call out the increasing use of ‘greenwashing’ vocabulary in the financial industry.
With the theme “Real Impact Behind the BIG Words”, the campaign focuses on how values-based banks mean what they say and deliver real impact. A global virtual panel discussion will take place on 10 November with leaders from the Banking on Values movement about the risks of greenwashing and what it means to aim for real impact.
“The financial industry has been quick to adopt big words such as “sustainability”, “climate action” or “social impact”. Unless these words are consistent with the overall values of the business, they will not be genuinely transformative.
ESG, for example, will only have a positive impact if there is a deep understanding and agreement by the senior leadership about the social and environmental impact it wants to achieve through the business,” says Rohner.
The GABV is made up of 70+ pioneering banks, credit unions, and microfinance institutions from across the world, and advocates for banks to take a pivotal role in shaping the economy, society, and the environment.
Members of the GABV have pioneered and helped expand initiatives like the Partnership for Carbon Accounting Financials (PCAF), a harmonized, open-source tool to measure and disclose the greenhouse gas emissions (GHG) of financial institutions’ loans and investments.
The GABV has been recently recognized as a Climate Leader by the Finance for the Future Awards and will take part in COP27 as an Observer NGO.
Values-based banks have the ambition to put people and the planet at the center of decision-making. With strong diversity in terms of size, business model, cultural contexts, or markets they operate in, they have a goal in common; to use finance to meet their community’s needs and create a positive impact.
Across the world, examples of work by GABV members include:
- The creation of a Rainbow Savings Account, which offers high-interest rates and advanced debit card facilities exclusively for the transgender community, from India’s ESAF Bank
- The successful application for a new gun store merchant code by Amalgamated Bank in the United States will create a new data point that financial institutions can use to enhance their detection and reporting of criminal activity, such as gun trafficking.
- The purchase of a private conservation reserve by Bank Australia to protect a 2,117-hectare site in Western Victoria from any future development