Tuesday, January 15, 2008

Climate Crisis Update: There is Still Time to Make a Profound Difference; Ceres Report Ranks World's Major Banks on Climate Change Governance Issues

Image: Earth at Night, NASA

"Climate change is the biggest risk the world faces this century and next," [Lord Nicholas Stern] told reporters on the tele-conference. "How big it turns out to be depends on our decisions."
"We face these risks largely because markets have failed," he said. "They've failed on the crucial dimension that people don't face the costs of the damages they inflict on others through climate change. Indeed, it's the greatest market failure the world has seen."
"We can overcome this market failure, we can fix the markets," Stern said, "but it's going to be governments, and business and ordinary people working with markets that will overcome this problem."
Big Banks Ranked on Climate Change Practices, Environmental News Service, 1-11-08

Climate Crisis Update: There is Still Time to Make a Profound Difference; Ceres Report Ranks World's Major Banks on Climate Change Governance Issues

Although it is very late, there is still time to adapt to the inevitable and mitigate the worst of it. There is still time to make a profound difference in what happens in the future. This report from Ceres underscores the encouraging sign that there is movement in high places, but it also underscores the painful fact that there is not nearly enough movement in such circles.

It is imperative that those of us with open eyes engage in dialogue with those who simply do not understand, or are afraid or unwilling to accept personal responsibility. The demands that global warming and the climate crisis make on us all must become a priority both at home and in the workplace. -- Richard Power

Goldman Sachs ranks highest and Bear Stearns ranks lowest of the investment banks rated in a first-ever analysis of the climate change governance practices of 40 of the world’s largest banks.

Of the diversified banks, the report issued Thursday by the Ceres investor coalition based in Boston ranks HSBC Holdings at the top and the Bank of China at the foot of the list. ...

In the United States, the Bank of America scored highest on the Ceres ranking because it has set target of seven percent to reduce intensity of emissions of its utility portfolio over 2004 levels. This bank wants to give preference in lending to utilites that are shrinking their carbon footprints.
Big Banks Ranked on Climate Change Practices, Environmental News Service, 1-11-08

The shortcomings were evident in the report’s final scores. Using a 1- to 100-point scoring system, the two highest scoring banks were European-based HSBC Holdings and ABN AMRO with 70 points and 66 points, respectively. More than half of the 40 banks scored under 50 points, with a median score of 42 points. ...

Among the highlights:

The banks have issued nearly 100 research reports on climate change and related investment and regulatory strategies, more than half of them in 2007 alone;
34 of the 40 banks responded to the latest climate-disclosure annual survey conducted by the Carbon Disclosure Project, a nonprofit group that seeks information on climate risks and opportunities from companies on behalf of investors;
28 of the banks have calculated and disclosed their GHG emissions from operations and 24 have set some set some type of internal reduction target;
29 of the banks reported their financial support of alternative energy, eight of which alone have provided more than $12 billion of direct financing and investments in renewable energy and other clean energy projects.

Yet for all of the positive momentum, many of the 40 banks have done little or nothing to elevate climate change as a governance priority – a trend that cuts across European, North American and Asian banks alike. For example:

Only a dozen of the 40 banks have board-level involvement and all but one of those firms are non-US-based;
Only a half-dozen banks say they are formally calculating carbon risks in their loan portfolios, and only one of the 40 banks – Bank of America – has announced a specific target to reduce greenhouse emissions associated with the utility portion of its lending portfolio;
No bank has set a policy to avoid investments in carbon-intensive projects such as conventional coal-fired power plants or Canadian tar sands.

The report concludes that more action is needed to align the banking sector with greenhouse gas reductions that scientists say are needed to avoid the dangerous impacts of climate change. In this regard, the report recommends that banks:

Elevate climate change as a governance priority for board members and CEOs, especially at U.S. banks where direct board involvement has been virtually non-existent;
Provide better disclosure about the financial and material risks posed by climate change, their own emission reduction strategies, and emissions resulting their financing and investment;
Explain how they are factoring carbon costs into their lending decisions, especially for energy-intensive projects that pose financial risks as carbon-reducing regulations take hold worldwide;
Set progressively higher targets to shrink the carbon footprint of their lending and investment portfolios, and be more transparent about they plan to meet these objectives.
HSBC, Other European Banks Receive Top Scores in First-Ever Ranking of 40 Leading Banks on Climate Change Strategies, 1-10-08

To view the full report, Corporate Governance and Climate Change: The Banking Sector, in .pdf format, click here.

For the Words of Power Climate Crisis Updates Archive, click here.

Click here for access to great promotional tools available on The Eleventh Hour action page.

To sign the Live Earth Pledge, click here.

For analysis of the US mainstream news media's failure to treat global warming and climate change with accuracy or appropriae urgency, click here for Media Matters' compilation of "Myths and Falsehoods about Global Warming".

Want to participate in the effort to mitigate the impact of global warming? Download "Ten Things You Can Do"

Want to join hundreds of thousands of people on the Stop Global Warming Virtual March, and become part of the movement to demand our leaders freeze and reduce carbon dioxide emissions now? Click here.

Center for American Progress Action Fund's Mic Check Radio has released a witty and compelling compilation on the Top 100 Effects of Global Warming, organized into sections like "Global Warming Wrecks All the Fun" (e.g., "Goodbye to Pinot Noir," "Goodbye to Baseball," "Goodbye to Salmon Dinners," "Goodbye to Ski Vacations," etc.), "Global Warming Kills the Animals" (e.g., "Death March of the Penguins," "Dying Grey Whales," "Farwell to Frogs," etc.) and yes, "Global Warming Threatens Our National Security" (e.g., "Famine," "Drought," "Large-Scale Migrations," "The World's Checkbook," etc.) I urge you to utilize Top 100 Effects of Global Warming in your dialogues with friends, family and colleagues.

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