Climate Change: Banks, progress on climate lobbying transparency
The banking sector is in a unique position to benefit from the economy-wide transition to net zero, given their exposure to multiple industries. They also have a powerful voice in influencing public policy and regulatory outcomes, both directly and indirectly through trade associations. However, where lobbying practices delay or obstruct progress towards climate objectives, this introduces systemic, legal, and reputational risks for investors. Brunel has therefore been raising the issue of lobbying transparency through our collaborative engagement with banks.
Research
Benchmark assessments from the Transition Pathway Initiative (TPI) indicate that most banks continue to fall short on lobbying disclosures.
1 Net Zero Commitment 17.80%
2 Sectoral GHG Reduction Targets 18.60%
3 Exposure and emissions disclosure 28.90%
4 Historical emissions performance N/A
5 Decarbonisation strategy 4.80%
6 Climate solutions 20.90%
7 Climate policy engagement 0.00%
8 Climate Governance 31.70%
9 Just transition 5.30%
10 Annual Reporting 18.70%
These findings underscore the need for stronger governance, oversight, and reporting on how banks influence climate-related policy.
IIGCC Banks Lobbying Thematic Working Group
Brunel has taken an active role in the IIGCC Banks Lobbying Thematic Working Group. The group’s mandate is to ensure that banks align their lobbying efforts with the urgent climate imperatives of the Paris Agreement. We have engaged with Royal Bank of Canada through the group.
In October 2024, Brunel, in collaboration with IIGCC, drafted and sent out letters to several banks asking them to align their lobbying activities with the goals of the Paris Agreement, to establish board-level oversight of these activities, and to fully disclose all lobbying efforts. The letters also call for banks to assess and review the alignment of their industry associations’ positions with climate policy.
ShareAction Working Group on Banks
Following the successful engagement at Barclays last year, we met with the CEO at Barclays to discuss progress on new commitments outlined in the updated oil and gas policy. As part of this engagement, we raised the importance of greater lobbying transparency, specifically around the alignment of their lobbying activities with the Paris goals. Brunel has also raised climate lobbying in engagements with Crédit Agricole and Société Générale.
Key Insights from Engagement to Date
Our engagements have generally focused on “low hanging fruit”, aiming for improvements while reinforcing long-term expectations around best practice lobbying alignment. We have also used publicly available benchmarks and analysis, to reiterate focus areas. In general, we’ve found that improved disclosure is often closely tied to internal governance; where organisations have clear oversight structures and efficient processes for information gathering, disclosures tend to improve. In certain cases, having access to internal champions within organisations has driven the agenda forward. However, in some jurisdictions such as Canada— we have noted that regulation appears to create practical barriers for transparency.
Next Steps
We will continue to raise the issue of lobbying alignment in our engagements with banks through 2025, focusing on those with material exposure to climate policy risk. Insights from this work will inform our ongoing contributions to the IIGCC and ShareAction working groups. We will report on progress in our next stewardship outcomes report and continue to push companies for clear disclosure, oversight, and alignment with the goals of the Paris Agreement.
