by Tommy Wilkes
LONDON (Reuters) – Four major banks, including Société Générale, have left the United Nations-backed Science Based Targets (SBTi) initiative aimed at examining climate targets set by companies, according to people familiar with the matter.
These banks, which also include Standard Chartered, HSBC and ABN Amro, have given up on having their targets validated by the SBTi because they fear it would hamper their ability to continue financing fossil fuels, the sources said.
Some banks have also expressed concern about the difficulty of meeting the SBTi’s requirements for setting greenhouse gas emissions targets, the sources added.
To justify their departures, which occurred separately over the past year, some banks cited their membership in another UN-backed group, the Net-Zero Banking Alliance (NZBA). This is less restrictive and allows banks to continue to finance fossil fuels provided that they make progress in reducing their emissions.
Many banking institutions believe it is still necessary to finance fossil fuels as long as economies depend on them.
The departure of these four banks puts in difficulty the SBTi, the most widely adopted standard in the world for reducing greenhouse gas emissions.
Launched as a non-profit organization, SBTi has certified the emissions targets of nearly 4,000 companies around the world as consistent with the Paris Climate Agreement aimed at limiting global warming to 1 .5 degrees Celsius.
The SBTi plans to launch a new standard in 2024 which will apply specifically to financial institutions which will have to stop financing any new projects linked to fossil fuels.
A restriction too heavy for Standard Chartered. A spokesperson for the bank confirmed that the group had left the SBTi, believing that the proposed standard did not sufficiently take into account “the transition (towards the abandonment of fossil fuels) of our customers and our markets”.
An HSBC spokesperson said the bank sets its emissions targets in accordance with NZBA guidelines.
On the side of ABN Amro, a spokesperson said that the bank had left the SBTi and remained a member of the NZBA.
A Societe Generale spokesperson said the French bank was committed to setting its emissions targets in line with the NZBA methodology.
Other major European banks which have signed the SBTi remain members. This is the case of Crédit Agricole, ING, BBVA and Swedbank, all of which told Reuters they were committed to validation by the SBTi of their emissions targets.
BNP Paribas did not respond to requests for comment on its SBTi status.
No major US banks have joined the SBTi, preferring the NZBA’s easier-to-follow standards.
(Reporting Tommy Reggiori Wilkes in London, Blandine Hénault for the French version, edited by)
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