Goldman Sachs ranks highest and Bear Stearns ranks lowest of the investment banks rated in a first-ever analysis of the climate change governance practices of 40 of the world’s largest banks. Of the diversified banks, the report issued Thursday by the Ceres investor coalition based in Boston ranks HSBC Holdings at the top and the Bank of China at the foot of the list.
Jon Williams, head of Group Sustainable Development, HSBC Holdings, said on a telephone news conference call Thursday that the bank is "committed to playing a leading role in finding and funding solutions to climate change." He said HSBC "has a longstanding commitment to climate change as the single largest social and environmental challenge this century."
Calling HSBC "the world's first carbon neutral bank," Williams explained that the bank has reduced its direct climate impacts by investing $90 million to improve the environmental efficiency of its buildings and has offset the greenhouse gases emitted by the energy used by its buildings since 2005.
As special advisor to the chairman on climate change matters HSBC appointed British economist Lord Nicholas Stern, a former adviser to the British government on the economics of climate change and development. His 2006 report, "The Stern Review" on the economics of climate change was first to make the point that strong action at manageable cost can dimish the magnitude of the climate change risk.
"Climate change is the biggest risk the world faces this century and next," Stern told reporters on the tele-conference. "How big it turns out to be depends on our decisions."
"We face these risks largely because markets have failed," he said. "They've failed on the crucial dimension that people don't face the costs of the damages they inflict on others through climate change. Indeed, it's the greatest market failure the world has seen."
The Ceres report shows that a growing number of European, U.S. banks and Japanese banks are responding to the risks and opportunities posed by climate change by setting internal greenhouse gas reduction targets, boosting climate-related equity research, and elevating lending and financing for clean energy projects. But many others still are not addressing climate change.
The report, "Corporate Governance and Climate Change: The Banking Sector is online at: www.ceres.org.