Financial institutions that don’t currently measure their financed emissions must start doing so now to understand their overall climate impact and the risks they face, Kreps said.
There is some hope however that Wall Street might actually start putting its money where its mouth is: 2021 is shaping up to be a whopper for green bond underwriters.
The fees earned in the first four months of 2021 were more than triple what banks pocketed during the same period of 2020, with companies and governments issuing more than $150 billion of green bonds, Bloomberg data show. The current record for full-year fees from green-bond issuance was the $1.3 billion earned in 2020.
JPMorgan is this year’s leading arranger of green bond sales, followed by BNP Paribas SA, Credit Agricole, Citigroup and HSBC Holdings Plc, according to Bloomberg data.
Still, banks are garnering about 40% more in fees from helping out fossil-fuel companies, and it’s a trend that—while narrowing—shows no sign of ending anytime soon.
“This is a significant opportunity for banks to play a leading role in driving the net-zero transition,” Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, said in a recent report. “With five years already elapsed since the Paris Agreement, talking the talk must be replaced with walking the walk.”