SHANGHAI, Europe Brief News – The Decarbonization efforts from Asia’s major banks are falling short according to the latest report. Many Asian Governments including China have declared long-term net-zero targets. However, it doesn’t seem their financial institutions are ready just yet.
This report is coming in from the Singapore-based environment group Asia Research & Engagement (ARE). They said it will be a little challenging to for meeting the Decarbonization limits and mitigate the future risk. It is important to set comprehensive funding strategies that adhere to the market developments too. No matter what the plan, everything must favor a climate-positive business venture.
All these efforts come with a warning that a ‘reactive approach’ must follow simultaneously. The carbon regulation is restricted to a certain level that may harm the business in the future. This report includes 32 different leading banks. They are listed among the nine major Asian markets. However, their effort seems to be insufficient for now.
Asian Banks are not taking into account the exposure to carbon-intensive assets. These assets are quite difficult to refinance and transfer. It needs a firm and urgent course correction or else widespread allocation of capital will not become possible. According to a previous report climatic changes are causing a lot of damage and loss to people. The natural habitats are will face severe effects in the long term.
Decarburization In Major Asian Banks
ARE has revealed that Asian banks will play a major role in helping the world move away from the high-carbon economies. However, none of the banks will be following the Paris Agreement objectives. Most of them are “misaligned” and differ from the national policies for decarburization in the countries.
Five banks have been given the lowest rating. The reason for them being low rated is that they have barely started their journey towards climate readiness. This includes China’s Bank of Ningbo, Ping An Bank, and the Shanghai Pudong Development Bank.
None of these banks in the report have designed any policies on coal power. The most carbon-intensive fossil fuel is fully aligned with the Paris Agreement. There are over 13 of the 32 banks that have a form of “no new coal” policy. ARE reported that the stress tests that are undertaken by the Swiss Re Institute have found that the GDP in 2050 is expected to be 18 percent lower than the world without climate change. If no action is taken, then things can turn out to be ugly.
