Triodos Bank has become one of the first banks to join the Net-Zero Banking Alliance (NZBA) convened by the UN, laying the groundwork for the huge but critical challenge facing the global banking community. The alliance joins the Race to Zero and was co-launched by the Prince of Wales’ Sustainable Markets Initiative Financial Services Taskforce (FSTF).
A total of 43 banks from 23 countries (with assets of $28.5 trillion) form Net-Zero Banking Alliance with its members committing to align operational and attributable emissions from their portfolios with pathways to net-zero by 2050 or sooner. The creation of the Alliance builds on the commitments to the Principles for Responsible Banking.
Peter Blom, Chief Executive Officer of Triodos Bank: “We welcome the Net-Zero Banking Alliance and the commitment of the signatories to adopt policies and strategies to reach a net-zero economy. We encourage all banks to set targets to reach net-zero well before 2050. We are running out of time and without strong action from all global stakeholders, the Paris climate goals will be out of reach. If that happens, future generations will be forced to cope with the adverse effects of uncontrolled climate change. Triodos Bank stands behind the most ambitious scenario of the Paris Agreement, limiting global temperature rise to at most 1.5°C. Today’s climate emergency can only be addressed when we all accept the responsibility to act and to do so together.”
As a signatory to the NZBA, Triodos Bank reinforces its commitment to address climate change through operational and lending practices. Since its foundation in 1980, the bank has always been committed to improving environmental impacts and outcomes. In 2020 alone, Triodos Bank and its investment funds financed renewable energy projects and energy saving projects that avoided the equivalent of over 5.7 billion kilometres travelled by car.
Triodos Bank is also committed to setting a science-based net zero target, informed by a full understanding of current carbon impacts and those of all loans and investments. To ensure a robust methodology, Triodos has supported the development of thePartnership for Carbon Accounting Financials (PCAF) which has now been adopted by over 100 financial institutions worldwide.
Triodos has urged other financial institutions to plot a similar path as an industry to keep the global increase in temperature within acceptable bounds, urging the financial sector to divest its fossil assets. The Triodos Bank 2019 vision paper on energy and climate called on all financial institutions to take a leading role in addressing the climate emergency.
As stated in the NZBA, ‘this Commitment recognises the vital role of banks in supporting the transition of the real economy to net-zero emissions, but we will only succeed in achieving this objective if our clients and other stakeholders also play their part. We make this commitment with the expectation that governments will follow through on their own commitments to ensure that the objectives of the Paris Agreement are met’.