Four global banks including HSBC, Standard Chartered, Société Generale, and ABN AMRO have exited the Science Based Targets initiative (SBTi).
Citing sources, Reuters reported that The banks have abandoned SBTi efforts to validate their goals because of concerns it could hinder their ability to continue financing fossil fuels.
According to media reports, some banks claimed the SBTi requirements would make it more difficult for them to work with and support businesses as they navigated the climate transition, especially those clients in less developed markets who still relied on fossil fuels for their energy needs.
ESG Today wrote that the banks declared their intention to resign before the organization’s planned introduction of a new standard that will evaluate financial institutions’ efforts toward achieving net zero. The standard will have stringent limitations on financing for fossil fuels.
Interestingly, every bank is a signatory to the Net Zero Banking Alliance (NZBA), an alliance of banks organized by the UN with the mission of advancing global net zero goals through their financing operations. Members of the NZBA pledge to set 2030 financed emissions targets, initially concentrated on important emissions-intensive sectors, and to transition operational and attributable greenhouse gas (GHG) emissions from their lending and investment portfolios to align with net zero pathways by 2050.
According to media reports that cited the SBTi, the organization got hundreds of responses in response to its exposure standard for June 2023. Consequently, it has incorporated draft Fossil Fuel Finance Position Paper criteria into a pilot version of near-term criteria and recommendations for financial institutions. The finalized criteria aim to remove common barriers to adopting science-based targets and reduce reliance on fossil fuels, highlighting the importance of financial intermediaries in decarbonizing the global economy.
2015: SBTi was founded as a collaboration between CDP, WRI, WWF, and UNGC, to establish science-based environmental target setting as a standard corporate practice
2022: SBTi established standards for financial institutions’ net zero goals
June 2023: SBTi released a position paper on fossil fuel financing restrictions
