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Banking in the low carbon economy

The Banking Environment Initiative is introducing a new initiative, Bank 2030, which aims to build a Roadmap for the Banking Industry to 2030 that will increase the level of low carbon financing in line with the climate challenge.

Context


To keep global temperatures from rising by more than 1.5C in line with the Paris Climate Agreement will require a complete recalibration of the existing economic, energy and industrial agendas.

It is estimated the transition to a low carbon economy will require $90 trillion of infrastructure investment between 2016 and 2030.3 A ‘business-as-usual’ scenario, which does not meet Paris objectives, would see the same amount of capital invested. This highlights a simple truth: that there is enough capital to create a low-carbon economy – what matters is ensuring capital flows toward the right projects.

 

Bank 2030


To address this challenge the BEI is introducing a new initiative, Bank 2030, which aims to build a Roadmap for the Banking Industry to 2030 that will increase the level of low carbon financing in line with the climate challenge.

Bank 2030 will identify how the transition to the low carbon economy is an opportunity for the banking sector. Drawing on the insights of leading banks and CISL experts, it will detail the ways that the industry can take advantage of this opportunity by setting out:

  • the banking sector’s role in financing the transition to a low carbon economy through the 2020s, up to 2030
  • what technology and policy trends are most likely to structure and drive this transition
  • the changes in demand for financial products throughout the transition and highlight what role banks can play in accelerating the build-out of low carbon assets
  • the key barriers obstructing low carbon project financing from achieving the scale consistent with international climate targets, and propose ways to overcome them
  • new and emerging banking products which have the potential to overcome existing barriers and scale financing to low carbon projects.

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