Wavestone Study Highlights Progress and Opportunities in Global Banks’ Disclosure on Net-Zero Targets

Paris, September 17th, 2024 – A comprehensive new study highlights the need for stronger communication from global banks regarding their net-zero targets, particularly in disclosing Scope 3 emissions, which constitute the majority of their carbon footprint. The findings reveal regional disparities, with European banks leading the way, and emphasize the need to strengthen regulatory frameworks to steer the financial sector toward more robust climate commitments.

Scope 1 emissions are direct emissions from sources owned or controlled by the bank, such as company vehicles. Scope 2 emissions are indirect emissions from the consumption of purchased electricity, heat, and cooling. Scope 3 emissions, the most significant and challenging to track, encompass all other indirect emissions, including those from the bank’s investments and lending activities.

Key Findings of Wavestone’s Net Zero Study

• Scope 3 Emissions Disclosure: Only 42% of banks report their Scope 3 emissions, despite these accounting for over 95% of total emissions.
• Net Zero Targets: 33% of banks have announced Net Zero targets, but only 16% have specific targets for Scope 3 emissions.
• Science-Based Targets: A minority of banks have set science-based targets aligned with international climate goals.

Regional Disparities – European Banks Lead in Transparency

European banks lead in transparency, with 84% disclosing Scope 3 emissions and 44% publishing decarbonization plans. France, Switzerland and the UK are particularly advanced in reporting and target setting. In contrast, only 12% of US banks report Scope 3 emissions, with a mere 4% disclosing decarbonization plans. The Asia-Pacific region shows that 33% of banks report Scope 3 emissions, and only 4% have decarbonization plans.

Regulatory Influence as Main Driver for Regional Differences

Higher disclosure rates in Europe are linked to stringent regulations and investor expectations. The UK and France, with mandatory climate-related financial disclosures, show higher compliance compared to the US and APAC, where such mandates are lacking.

Call to Action: Enhanced Disclosure and Science-Based Targets

Policymakers should enforce rigorous disclosure standards, particularly for Scope 3 emissions. Banks should adopt science-based targets validated by initiatives like the Science Based Targets initiative (SBTi) to align with the Paris Agreement. Implementing sector-specific guidance from frameworks such as the Glasgow Financial Alliance for Net Zero (GFANZ) and the Net-Zero Banking Alliance (NZBA) is crucial.

The Path Forward

The study underscores the urgent need for global banks to improve climate disclosures and adopt science-based targets. Enhanced transparency and accountability will enable the financial sector to play a pivotal role in combating climate change.

For more information and to access the management summary, please visit:

For media inquiries please contact:

Global and Germany, Austria:

Christian Welsch, Director Head Global Brand, Marketing & Communications
christian.welsch@wavestone.eu, +49 151 5870 8028

UK:

Laura Gordon, Communication & Marketing
laura.gordon@wavestone.com, +44 7787 115 642