Smaller banks have a key role to play in the climate fight
Many are still a long way from understanding the risk climate change poses to their businesses.
It is easy for those who work on sustainability to forget how widespread ignorance, indifference and even antipathy to the topic remains among those who don’t.
Even at the most environmentally minded banks, sustainability specialists bemoan the lack of knowledge and awareness among their more commercially minded colleagues; one notes that a team member still confuses biodiversity and biosecurity.
The bigger banks are trying to address this. Achieving net zero by 2050, as many of them have committed to doing, has increased the incentives for ensuring that all staff understand the importance of aligning with the Paris climate goals and that all businesses are working towards it.
State ownership is widespread … while even privately owned lenders are often controlled by local elites
Clearly, this is all to the good. The biggest global and European banks finance, or arrange financing for, a substantial chunk of the highest-polluting industries, from energy and mining to construction and defence.
At the same time, much of the financing for other environmentally problematic sectors, such as transportation, agriculture and manufacturing, is provided by smaller local and regional banks – many of which are more willing and able to lend than ever after the liquidity inflows of the Covid era.