HSBC is the bank that is most actively tackling climate change, but the banking sector still has a long way to go, according to the first report to rank the climate change policies of the world's largest banks.
The study of 40 global banks, conducted by RiskMetrics Group for Ceres, evaluated how each institution is addressing climate change in five areas – board of director oversight, management performance, public disclosure, greenhouse gas (GHG) emissions, accounting and strategic planning.
European banks dominate the top of the table, with HSBC in the lead, scoring 70 out of 100 points. HSBC was found to be active in all five of the areas evaluated.
ABN Amro came second in the study with 66 points, followed by UK banking groups Barclays and HBOS, which both scored 61 points. Germany's Deutsche Bank follows with 60 points.
But more than half of the 40 banks scored under 50 points out of 100, and the median score was 42 points.
Only a handful of banks are pricing carbon into their financial decisions or setting targets to reduce greenhouse gas emissions. "For all of the positive momentum, many of the 40 banks have done little or nothing to elevate climate change as a governance priority – a trend that cuts across European, North American and Asian banks alike," said the report.
"More banks realise that climate change is a big issue, but their responses so far are the tipe of the iceberg of what is needed to tackle this colossal global challenge," said Mindy S. Lubber, president of Ceres.
Last year HSBC unveiled a $90m (£45m) global environmental efficiency programme. Over five years, HSBC will spend this money to reduce the bank's impact on the environment through a series of initiatives, including introducing renewable energy technology, and water and waste reduction programmes.
HSBC was 'carbon neutral' by 2006. To achieve carbon neutrality HSBC purchased verified emissions reductions (VERs) from several renewable energy projects in China and Thailand.
In July 2007, HSBC appointed Sir Nicholas Stern as special adviser to the chairman on economic development and climate change. Stern is best known as the former World Bank chief economist and author of the Stern Review on the Economics of Climate Change.
Also, HSBC's direct banking subsidiary first direct recently disclosed plans to install automated computer shut down software from NightWatchman to automatically switch off the 2,600 computers in an effort to reduce its carbon emissions by 147 tonnes and save £24,000 per year on energy costs.
US investment bank Bear Stearns came bottom of the table with zero points, just below San Francisco-based Franklin Resources which was awarded one point. Just above that Bank of China got four points and Industrial Bank of China earned eight points.
RiskMetrics Group for Ceres is a coalition of investors, environmental groups and other public interest groups.