Climate Safe Lending Network

The challenge: More than a decade after the global financial crisis, with less than a decade to prevent catastrophic climate change – and despite public commitments – our financial system is still financing fossil fuel expansion and failing to direct sufficient finance towards a green, just transition. According to Rainforest Action Network’s 2022 Banking on Climate Change report, since the 2015 Paris Agreement the world’s 60 largest commercial and investment banks have invested $4.6 trillion into fossil fuels. The major role that banks play in the global economy – through lending and investment decisions, employment, tax contributions and international trade – means that they play a critical role in successfully transitioning to net zero carbon economies. Key to containing carbon emissions to a 1.5°C global temperature increase is aligning bank lending with the goals of the Paris Climate Agreement.

What can be done? Getting global emissions of greenhouse gases onto a rapidly declining pathway requires deep transformation of the banking system – from the level of purpose, values, and mindsets through to the business processes and strategies that drive banks’ impact in the world. This level of change requires a two-pronged approach that consists of 1) supporting banking professionals in leading the adoption of climate safe lending policies (influencing change from within banks); and 2) aligning the efforts of external influencers, such as clients, investors, financial regulators, and environmental activists with a shared interest in removing carbon emissions from lending (pressuring banks to adopt climate-safe lending practices).

How Climate Safe Lending Network (CSLN) is meeting the challenge: CSLN supports lending institutions to collaborate with each other and wider parts of the financial system – including investors, clients, regulators, policy makers, academics, and civil society organizations – to align bank lending with climate safe scenarios that contain emissions to a 1.5℃ temperature increase and incorporate strategies for a socially equitable and just transition.

CSLN is concentrating collective efforts to align bank lending with climate safe scenarios through these collaborative initiatives, each of which is capable of incubating new ideas and driving transformative projects:

• Climate Safe Learning Lab: Connects and supports banking professionals who are advancing the climate agenda within their organizations.
• Climate Safe Policy Initiative: Engages commercial and central bank leaders in shifting the narrative about financial regulation to encompass financial and planetary stability.
• Climate Safe Prosumers & Influencers Initiative: Mobilizes commercial and retail clients to collectively influence banks to transition to climate safe lending practices.

Through these efforts, CSLN catalyses systems change by focusing on key leverage points in the banking system that when collectively acted upon by public, private, and civic sector leaders, can accelerate the decarbonization of the banking sector and real economy.