However banks are not guilty of all charges. A landmark report covered in Pensions & Investments, Oct. 22, 2015, examined 61 of the world's largest banks on their management of climate-related risks and found positive trends, too.
Australia and New Zealand Banking Group set a target to increase lending to gas and renewable power generation by 15% to 20% through 2020. Bank of America Corp. has made a commitment to finance $20 billion of new climate mitigation, adaptation and energy-efficient technologies and Citigroup Inc. has successfully directed $54 billion toward climate change-related opportunities.
Wells Fargo & Co. also showed some best practice by disclosing that renewable energy projects owned in whole or in part by the bank produced 11% of U.S. solar photovoltaic and wind energy generation in 2013.
I along with other institutional investors are seeing leadership in places such as U.S. regional bank PNC Financial, which has adopted annual environmental stress tests. The first in 2015 analyzed the regulatory impact of the U.S. Environmental Protection Agency's clean power plan on its coal and utilities portfolios. In Canada, TD Bank Group has begun to embrace climate change as a real economic opportunity, as well as a risk. The bank became carbon neutral in 2010, while concurrently investing in green buildings, energy efficiency and renewable energy sources alongside financing an industry-leading $500 million green bond.
These responses are encouraging but, taken together, form only the tip of the iceberg of what is needed to tackle this enormous global challenge. The world's 20 largest banks, representing more than $2 trillion in market capitalization, are crucial players in combating the impact of climate change.