"Major international financial groups must demonstrate that they are capable of taking seriously the environmental risks linked to their investments. They must provide more information on the matter, guarantee transparency and reveal how they intend to limit the risks and seize the opportunities linked to climate change." It is with these words that a group of one hundred major investors addressed, in an open letter, the chief executive officers of 62 of the world's most important banks.

"Banks too must change in order to limit global warming"

Among the recipients of the appeal are Bank of America, Deutsche Bank, HSBC Holdings, JP Morgan Chase, Mitsubishi UFJ Financial Group, BNP Paribas, Australia and New Zealand Banking Group, Société Générale, Crédit Agricole and Natixis. "Climate change and the transition towards a low-emission model generate concrete risks and opportunities for investors. Only by ensuring greater transparency can investors be enabled to assess and compare the environmental performance of each bank," explained Isabelle Cabie, of the Luxembourg-based asset management firm Candriam.
"Limiting the rise in average global temperature to two degrees Celsius by the end of the century entails a major change in our financial and economic modus operandi. That is why we want to understand how the issue is being addressed by the top executives of the leading international groups," echoed Lauren Compere, of the American firm Boston Common Asset Management.

"Those investing in American coal risk losing $104 billion"

The investors cite in particular a university study which highlights how investments risk losses of between 5 and 20 per cent of the overall value of portfolios if not enough is done to reduce greenhouse gas emissions. A more recent analysis, produced by Carbon Tracker, spoke of $2.3 trillion in stock market values that could evaporate as a result of the devaluation of particularly polluting companies, starting with those active in the oil sector.

Finally, a week ago, the same NGO published a report showing that shareholders in the major energy companies in the United States risk losing up to $104 billion. This is because, for example, 78 per cent of American coal-fired power plants will no longer be competitive by 2025.

Colossal investments needed to meet the Paris Agreement objectives

"Cheap gas and renewable energy will continue to erode the coal market. President Donald Trump has pledged to revive the sector, but the reality is that the gradual phase-out of the coal industry will save billions of dollars and improve the US economy," declared Matthew Gray, co-author of the report, as reported by the French magazine Novethic.
The signatories of the letter to the 62 banks indicate finally that, in order to be certain of meeting the objectives set by the Paris Agreement, no less than $93 trillion will need to be invested by 2030. The equivalent of what the value of world gross domestic product for an entire year is forecast to be in 2020.