Financial services firms admit they do not have carbon neutral targets in place
Financial services firms are struggling with net zero targets, with more than half (51%) of firms saying they do not yet have a target in place to achieve carbon neutral status.
Just 18 per cent of financial services firms have a plan to achieve carbon neutral status by 2025, and 16 per cent claim they are already carbon neutral, according to a poll by EY.
EY carried out a poll across 85 financial services firms in February. Participants included 45 banks, 44 insurers and 29 asset managers.
The majority (64%) of firms surveyed thought that although process was being made toward net zero, the path to a lower carbon economy remained some way off.
Some 57 per cent of respondents thought the climate change regulatory agenda was proceeding at the right speed, but a minority (11%) admitted they were struggling to keep pace.
All listed companies in the UK are required to disclose their governance around climate-related risks and how they aim to identify, asses and manage them.
However concerns have been raised that some companies have not been property making reference to climate change-related factors, while some merely make vague references to a “Paris-alignment” or “net-zero” in their reports, but provide limited details, leading to concerns about greenwashing.
Gill Lofts, UK sustainable finance leader at EY, said: “While advancements have undoubtedly been made across the financial services sector, progress on sustainability is somewhat uneven amongst firms.
“For the financial services industry as a whole to become carbon neutral within the timeframe set by the UK government, more needs to be done now and firms must work collaboratively.”
Zero carbon by 2050
The government has pledged to reduce carbon emissions by 68 per cent over the next 10 years, in a bid to reach its target of net zero carbon emissions by 2050.
Prime Minister Boris Johnson has laid out a ten-point plan to achieve the goal, including banning the sale of new diesel and petrol cars by 2030, providing £582m in grants to aid buyers of low or zero emission vehicles and spending £500m on developing hydrogen technologies to heat homes.
More than a third (34%) of financial services companies polled by EY thought “very few” companies in the sector currently had the appropriate focus on sustainability.
This is despite the fact that many are aware of the risks posed by inaction, with 35 per cent believing climate change could have a negative impact on their business if they do not make changes now, and 30 per cent claiming they are currently exposed to risks.
The UK is set to host the Cop26 UN climate summit in Glasgow in November this year, where countries will be asked to sign up to long-term targets of net zero emissions by 2030.