Energy crisis jeopardizes – and galvanizes – Europe’s sustainability leaders
European banks have raced far ahead of their US peers on sustainability. But the continent is now facing an energy emergency, creating pressure from some corners to reverse investment declines in oil and gas. Can Europe’s banks remain frontrunners in sustainable finance in today’s fragile geopolitical environment?
As winter approaches in Europe, Russia’s war in Ukraine is threatening the continent’s resolve not just in regard to democracy but also the environment.
Banks’ energy transition strategies are in danger of being delayed by the funding needs of commodities traders and carbon-intensive energy utilities. Gas shortages have forced governments to switch back to coal in Germany and elsewhere. And some in Europe – notably in the UK – are pushing for more investment in, and therefore financing for, new fossil-fuel infrastructure.
For many European firms, after decades of cuts in global banking, sustainable finance is now vital to their efforts to find a new role in global finance.