Banks play a critical role and need to look at greatly reducing the greenhouse gas emissions of loans and funds’ investments, using a science-based targets approach. Last year, Triodos Bank announced its target of reaching net zero emissions as early as possible, and at the latest by 2035 – one of the most ambitious targets within the financial sector globally.
In doing so we acknowledge the realities of how difficult achieving net zero will be – and that this is particularly the case for financial institutions, who must consider how to decarbonise their loans and investments in an environment where the real economy is not regulated to support this.
We have joined the Net Zero Banking Alliance and the broader GFANZ umbrella as an important international coalition to which financial institutions have committed themselves. However, signatories must be held accountable for these initiatives to be worthwhile.
We call for an end to investment in fossil fuel and exploration, even at a time when fossil fuel might seem to be the answer to the energy crisis. Triodos Bank believes that now is the time to accelerate the transition to sustainable energy. In support of this, we want to see a carbon pricing mechanism that fully reflects the social and environmental cost of carbon-intensive industries, and for fossil fuel subsidies to be systematically dismantled.
Whilst addressing climate change is fundamental, we must reduce emissions in a way that respects the social inclusion of all people within planetary boundaries, and which enables a just transition. This isn’t about slowing the pace of change or offering up excuses – this is an emergency - but it is about ensuring that we find holistic solutions.
It is impossible to hide from the fact that climate change is disproportionately affecting those who did the least to cause it.
To make the planet whole again, we have to work together. And we must truly take responsibility for the role that financial institutions – and the developed world more widely – can play in solving this crisis.