Finance industry working on best practice code for climate change

Leading non-governmental organisation, The Climate Group is working with a group of major international financial institutions to develop the first comprehensive global framework for the sector’s response to climate change.

The new voluntary framework, it says, will help guide operational C02 emission reduction commitments as well as provide strategic direction across the full range of products and services, including research, asset management, retail banking, corporate banking, insurance and re-insurance, investment banking and project finance.

The move will both bring together existing initiatives under one common umbrella and enable the sector to monitor and disclose progress on embedding climate change considerations into core business strategy against key indicators.

Steve Howard, chief executive officer of The Climate Group said the finance sector had “a crucial role” to play in enabling the low carbon economy and accelerating climate action across other industry sectors: “We have been encouraged by the high level of industry commitment to launch an umbrella framework that advances industry best practice.
“We believe this voluntary approach will drive a deeper understanding of the commercial implications of climate change and the role financial institutions can play in assisting their customers and clients with the adaptation and mitigation efforts needed to address climate change.”

The Climate Group has not yet named the companies it is working with on the code, but one institution likely to be involved is HSBC, which last year launched the HSBC Climate Partnership, a five-year US$100 million partnership to respond to the urgent threat of climate change worldwide with the support of The Climate Group, Earthwatch Institute, Smithsonian Tropical Research Institute (STRI) and WWF.

Howard said initial feedback from stakeholders to the Code of practice had been “extremely constructive and supportive. Everyone involved is keen to welcome other global banks and financial institutions into the initiative in the coming months.”

The Climate Group expects to publish the framework in the next few months.