Climate change
We recognise the importance of addressing the threat of climate change.
Our climate responsibilities
We take our responsibility towards the environment seriously and are committed to meeting the goals of the Paris Agreement to achieve net zero by 2050. We are conscious that the emissions impact of the assets and sectors that we finance can contribute to climate change, and as a financial services provider we recognise the role we have to play in supporting the transition to a more sustainable future. This includes supporting our customers and partners with their own transition journeys. Our efforts to reduce the impact of our operations on the environment continue at pace, and we strive to take actions that make a positive contribution to the world around us.
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Understanding and disclosing our impact
In order to set out our own transition pathway towards lower emissions, we need to understand both our operational emissions (scope 1, 2 and 3) as well as our financed emissions (scope 3). In 2022, we have undertaken an initial assessment of our indirect scope 3 emissions and disclosed these in our 2022 annual report. For our initial assessment of our financed emissions, we have evaluated our loan book using relevant PCAF (“Partnership for Carbon Accounting Financials”) methodologies.
In 2022, we published our inaugural TCFD (“Taskforce on Climate-related Financial Disclosures”) report, where we highlighted our progress in integrating climate risk into our governance infrastructure, business strategy and risk management framework. To date we have made good progress embedding climate risk into our ways of working, ensuring we consider the impact of climate change in the decisions we make.
The TCFD encourages consistent, reliable, and clear measurement and reporting of climate-related financial risks. Its recommendations provide an important framework for understanding and analysing how climate change impacts our customers, our own operations and our strategy. We recognise there is much work to be done and we are committed to making regular, transparent TCFD disclosures to communicate our progress as we develop our climate capabilities. We will continue to encourage our customers, suppliers and the industry to do the same.
Our climate strategy
During the last year, we have made progress in developing further our climate strategy and our understanding of our broader emissions including our full operational emissions (including Scope 3) and early assessment of our financed emissions in our loan book.
We recognise the importance of addressing the threat of climate change and also appreciate the vital role we can play in supporting our customers on the transition to a low-carbon economy. Having previously set ambitious short-term net zero targets for our Scope 1 and 2 operational emissions, we are now setting ourselves a wider and longer-term ambition to align all of our operational and attributable GHG emissions from our lending and investment portfolios to align with pathways to net zero by 2050. To this end, we have recently joined 116 other banks globally, as a signatory to the Net Zero Banking Alliance. This sets us on a clear trajectory to further develop our understanding of our full value chain emissions (including our financed emissions) and to set short-term and long-term targets aligning our operational and financed greenhouse gas emissions with pathways to net zero by mid-century.
Our climate strategy is formed around three pillars:
- Achieving net zero operations across our buildings and fleet (covering our Scope 1 and 2 emissions), as well as our wider operational impacts in our supply chain emissions (Scope 3)
- Measuring and reducing our financed emissions across our lending and investment portfolios to support our customers to meet their own goals and aligning our pathway to net zero by mid-century
- Developing our green financing activities, growing existing green markets (such as our current work supporting our customers’ transition to battery electric vehicles), as well as opening new green asset categories where they align to our lending expertise and appetite.
