US bank commits to zero net emissions by 2050, a first among regions
- The U.S. Bank aims to achieve net zero greenhouse gas emissions by 2050 – including funded emissions – among a host of other environmental goals, she said Wednesday in a press release. The move makes it the first major regional bank in the United States to do so, according to American banker.
- The Minneapolis-based bank has pledged $ 50 billion by 2030 to fund customers and projects that have a positive impact on the environment. The bank is establishing a framework that will allow it to more clearly track that figure and aims to release more details by the end of 2022, he said.
- The U.S. bank also wants to source 100 percent renewable energy as part of its operations by 2025, she said.
Wednesday’s environmental goals give US Bank another chance to show that it thinks like a bigger bank rather than just becoming a bank. The September $ 8 billion deal to buy MUFG Union Bank repositioned the Minneapolis lender as the nation’s fifth-largest retail bank – and largest regional bank. US Bank’s climate goals allow it to set the tone for the rest of the industry.
America’s four largest retail banks – along with investment banks Goldman Sachs and Morgan Stanley – have all pledged to reduce net issuance by 2050 between September 2020 and March this year.
The American bank announced Wednesday that it has joined the Partnership for Carbon Accounting Financials (PCAF), a consortium that intends to standardize the way in which banks measure and reduce their climate impact. The bank is committed to measuring and disclosing its carbon footprint using the consortium’s standards. Morgan Stanley, Citi and Bank of America joined the group in July 2020.
“Running our business in an environmentally sustainable manner is an important part of corporate responsibility and essential to the health of our economy,” US bank CEO Andy Cecere said in a press release on Wednesday. âWe continue to take steps to improve the way we assess the financial and operational risks that climate change poses to our business, our customers and the world. “
The US bank also pledged on Wednesday to integrate climate risk into its risk management framework, and said it had appointed a new climate risk manager to lead strategy and coordination of climate risk management activities. This aligns with recommendations from regulators, including the New York Department of Financial Services and, presumably, the Office of the Comptroller of the Currency. The bank added that it would disclose its climate risk in line with recommendations from the Climate-Related Financial Disclosures (TCFD) Task Force.
The bank’s $ 50 billion green funding pledge appears to be inspired by Goldman Sachs’ playbook. The investment bank announced in December 2019 that it would commit $ 750 billion over 10 years in loans, subscriptions, advisory services and investments to companies and projects focused on renewable energy, sustainable transport, l affordable education and other areas. When Goldman pledged to net zero in March, he also made clear that he had spent $ 156 billion on this decade-long green funding goal.
The American bank is not the only one among banks of its size to take work climate risk into account in its overall financial situation. Regions based in Birmingham, Alabama, in June released their first report on climate risks align with TCFD standards. And even smaller banks, like Amalgamated Bank, have made net zero commitments. New York-based Amalgamated last month pledged to achieve zero net greenhouse gas emissions by 2045 – five years earlier than the standard ambition.
As for US Bank, it said on Wednesday that it was continuing to work towards a target of reducing emissions by 60% by 2044. The bank said it achieved 44% reduction in 2019 – 10 years earlier than originally expected. .
The Minneapolis lender also said its community development company will begin offering debt financing on renewable energy projects starting this year.