The E-axes Forum on Climate Change, Macroeconomics, and Finance

Raphaël Poignet

“An Examination of Net-Zero Commitments by the World’s Largest Banks”

Event description

The paper examines the net-zero commitments made by Global Systemically Important Banks (G-SIBs). In recent years, large banks have significantly increased their ambition and now disclose more details regarding their net-zero targets. There is also growing convergence, with the vast majority of G-SIBs now being part of Net-Zero alliances. Despite this progress, some practices should be further improved. The paper assesses climate-related risk disclosures publicly available for G-SIBs in 2022. The paper gives an overview of potentially problematic disclosure practices about their net-zero commitments. It identifies and discusses several observations, such as the significant differences in sectoral targets used despite many banks sharing the same goal, the widespread use of caveats, the missing clarity regarding exposures to carbon-intensive sectors, the lack of clarity of “green financing” goals, and the reliance on carbon offsets by some institutions. The identified issues may impact banks’ reputation and litigation risk and risk management. The paper explains how the introduction of comparable international rules on climate disclosure and the introduction of transition plans, as envisaged and partly already in place in the European Union, could help mitigate these risks.

Moderator:

Anastasia Pappas
FOUNDER, E-AXES FORUM

Raphaël Poignet

Senior Team Lead
Raphaël Poignet is a Senior Team Lead in the European Central Bank (ECB) in the Directorate General in charge of the direct supervision of systemic and international banks. He serves as a counsellor to the Senior Management and works on horizontal topics relevant to his business area. In particular, he is leading the supervisory work regarding climate-related and environmental risk disclosures, and is a member of several international working groups on that topic. He joined the ECB in 2014, following an experience as on-site inspector in a large banking group in France. He holds Master degrees from ESSEC Business School and Seoul National University, as well as an FRM certification.

Katharina Plavec

Graduate Programme Participant
Katharina Plavec is a Graduate Programme Participant at the European Central Bank. She currently works in the ECB’s Legal Services and also has experience in banking supervision. She has been involved in various topics related to climate and environmental risks, including the analysis of (current and upcoming) EU legislation and the assessment of banks’ disclosures. Katharina holds a PhD in Law from the University of Vienna and a MSc in Law and Finance from the University of Oxford.

Paper and slides

An examination of net-zero commitments by the world’s largest banks (Paper)

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