- The US bank aims to achieve net zero greenhouse gas emissions – including financed emissions – by 2050, along with a host of other environmental goals Wednesday in a press release. This makes it the first major regional bank in the US to do this American banker.
- The Minneapolis-based bank has committed $ 50 billion through 2030 to fund customers and projects that have a positive impact on the environment. The bank is creating a framework that will allow it to track that number more clearly and plans to release more details by the end of 2022, it said.
- The US bank also wants to use 100% renewable energy in its operations by 2025, it said.
Wednesday’s environmental targets give the US bank another chance to show that it thinks like a bigger bank, rather than just growing into one. September $ 8 billion deal on the purchase of MUFG Union Bank positioned the Minneapolis-based lender as the fifth largest retail bank in the country – and the largest in the region. The US bank’s climate-friendly goals allow it to set the tone for the rest of the sector.
The four largest US retail banks – plus investment banks Goldman Sachs and Morgan Stanley – have all pledged to between by 2050 September 2020 and March this year.
The US bank announced on Wednesday that it has joined the Partnership for Carbon Accounting Financials (PCAF), a consortium that aims to standardize the way banks measure and reduce their climate impact. The bank has committed to measuring and disclosing its carbon footprint in accordance with the consortium’s standards. Morgan Stanley, Citi and Bank of America joined the group in July 2020.
“Running our business in an environmentally responsible manner is an important part of corporate responsibility and is critical to the health of our economy,” said Andy Cecere, CEO of the US bank, in a press release on Wednesday. “We continue to take steps to improve our assessment of the financial and operational risks climate change poses to our business, our customers and the world.”
The US bank on Wednesday also promised to include climate risk in its risk management framework, saying it has appointed a new climate risk manager to lead the strategy and coordination of climate-related risk management activities. This is in line with recommendations from regulators, including New Yorkers Financial Services Department and probably that Office of the Auditor. The bank added that it will disclose its climate risk in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).
The bank’s $ 50 billion green funding pledge appears to be copying a page from Goldman Sachs’ playbook. The investment bank said in December 2019 that it would Tie up 750 billion US dollars Over 10 years in lending, underwriting, advising and investing for businesses and projects with a focus on renewable energy, sustainable transportation, affordable education and other areas. When Goldman made its net-zero pledge in March, it also stated that it had allocated $ 156 billion towards this decade-long green funding goal.
The US Bank is not the only one among banks to incorporate its size in terms of work climate risk into its overall financial picture. Birmingham, Alabama-based Regions in June published its first climate risk report Adaptation to TCFD standards. And even smaller banks like Amalgamated Bank have made net-zero promises. New York City-based Amalgamated committed last month to achieving net zero greenhouse gas emissions by 2045 – five years earlier than standard ambitions.
The US bank said Wednesday that it continues to work towards the goal of reducing emissions by 60% by 2044. The bank said it hit a 44% reduction in 2019 – 10 years earlier than originally expected.
The Minneapolis-based lender also said its community development company will begin offering debt financing for renewable energy projects starting this year.