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November 24, 2021

What we’re reading: November 24

Welcome to Sustainable Views’ knowledge hub: the section of the site where we archive useful research we’ve read over the past weeks, so you can improve your knowledge and easily refer back to your favourite resources

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No bank fully aligned with EU climate risk expectations

The European Central Bank has assessed the performance of climate-related and environmental (C&E) risk management in the banking sector, finding that firms are behind in their efforts to match new expectations.

The ECB set out 13 new expectations of banks in November 2020. Asking companies to assess their own progress, it found that most are still some way off compliance.

No bank fully met the ECB’s standards, with 90 per cent of respondents admitting that they are either not aligned or partially aligned.

The ECB strikes an undertstanding tone, however, recognising the challenges inherent in compliance and committing to work with the industry. It’s report shares examples of best practice, and you can read it here.

Three oil and gas companies align with 1.5 degree target

Three oil and gas comapnies have become the first to align their business activities and strategy with the most ambitious targets of the Paris Agreement on climate change, according to the influential Transition Pathway Initiative.

The TPI, whose supporters manage or advise almost $40tn of assets, found that energy sectors were “finally moving out of first gear” in tackling climate change. TotalEnergies, Occidental Petroleum, and Eni are all aligned with limiting global warming to within 1.5 degrees above pre-industrial levels.

Thirty-four per cent of firms are now aligned with a 2 degree scenario, but the TPI warned that there is still significant work to be done in its sectoral analysis. Read the full report here.

Alternative solutons to including gas and nuclear in taxonomy

The UN Principles for Responsible Investment framework has set out a position paper on the treatment of gas-fired and nuclear power production in the EU’s greent taxonomy, folllowing speculation that the methods will be endorsed by the framework.

A leaked EU document was reported to have suggested that gas power will be considered ‘sustainable’ as long as it meets an efficiency tagret of 100 grams of CO2 per kilowatt-hour, and EU president Ursula von der Leyen tweeted in October that gas will be needed in the transition to a green economy.

In its position paper, the PRI urges that legislators “must not use this opportunity to let economic and political questions on energy security and cost thwart the scientific integrity of the EU
Sustainable Taxonomy; this would tarnish investors’ interest to use it as an instrument for driving sustainable investments, and lead to market fragmentation and risk of greenwashing”, and suggests a carve-out for transitional activities. Read the full paper here.


A service from the Financial Times