Press Release
Banking on Carbon

Issue date: 24 October 2006

There is a growing awareness of the long-term exposure of banks from the risks of climate change. However are banks going far enough fast enough, and capitalising upon the opportunities presented by the challenge of climate change?

• Leading banks are aware of a growing pressure to disclose more on the carbon footprint of the loan book.
• The recent Carbon Disclosure Project* report highlights that only 14% of FTSE 500 banks considers regulatory responses to climate change to represent potential financial risk
• Integration of climate risk research systematically into stock selection and portfolio construction processes is estimated to occur in less than 0.1% of invested assets.

The evidence suggests that the sector as a whole has some way to go to understand risks and opportunities and implement really effective climate change policies.

In order to push forward thinking Entec has teamed up with Henderson Global Investors to undertake research into climate change policies and carbon accounting in the first study of its kind focussing on UK banks.

We are looking specifically at:

• climate change risk assessment processes
• how the sector can better define carbon flows (who owns, emits, sells and buys the carbon)
• how the sector could define some of the carbon risks associated with typical banking products and services
• exploring the need for climate change to move from corporate responsibility to business strategy

Next steps

Entec is interested in talking to UK banks and their stakeholders to feed into our research. We will be holding a workshop to discuss some of the initial findings on 8th November at Henderson Global Investors in London . The purpose of the workshop will be:

1. To provide feedback from our stakeholder consultations

2. To provide a forum to start discussions of some key points

3. To share experiences and issues of concern

If you would like to know more, please contact Sarah Pratt, Entec’s project manager, on 01606 354 831.

Enquiries to:

Victoria Logan
Email: logav@entecuk.co.uk
Tel: 0191 272 6337
Fax: 0191 272 6592

Notes to Editors:

• Entec is one of the UK ’s largest sustainability, environmental and engineering consultancies. The technical and business skills of over 700 staff and associates are dedicated to delivering strategic and technical solutions which bring commercial benefits to our customers at home and overseas. This know-how is based on over 60 years of consulting experience in the public and private sectors. For further information, please visit our website www.entecuk.com

• Entec’s Corporate Responsibility team undertake research to support the delivery of informed, up to date, quality advice to its clients. More information on Entec’s Corporate Responsibility services can be found on the website, or speak to Maurice Hoban on 01926 439 082. For more information regarding the ‘Banking on Carbon’ research project please contact Sarah Pratt on 01606 354 831.

• Programme & Outputs for Research

October A number of key stakeholders will be consulted to gain feedback on the issues associated with banks and climate change policies. Key stakeholders we hope to engage include SRI Analysts, the Carbon Trust, Forum for the Future, NGO’s including Bank Track, WWF, Green Alliance.

November Discussions with at least 6 UK banks will be held to discuss existing practice, issues, gaps and barriers.

January Findings and recommendations will be published in a report and circulated.

 

• Henderson Global Investors is a leading international investment management company with a dynamic approach to investment management across the globe. Their wide range of investment products and services covers all major asset classes, including equities, government and corporate bonds, property, private capital, hedge funds and portfolio management services. For more information, please visit www.henderson.com

• The Climate Group, Finance Leaders, facilitated by Mark Kenber, The Climate Group Policy Director. The finance leaders consist of 12 leading global banks and insurers. For Further information please visit http://www.theclimategroup.org

• *Carbon Disclosure Project 4 2006. The Carbon Disclosure Project (CDP) provides a secretariat for the world's largest institutional investor collaboration on the business implications of climate change. CDP represents an efficient process whereby many institutional investors collectively sign a single global request for disclosure of information on Greenhouse Gas Emissions. For further information please visit www.cdproject.net

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