U.S. Banks Set to Fall Short of Global Oil and Gas Emissions Reductions Goals by 2030, New Analysis Finds

BOSTON, April 12, 2023 /PRNewswire/ -- With seven years to meet 2030 climate goals, none of the biggest U.S. banks are on track to align their oil and gas targets with a scenario limiting average global temperature rise to no more than 1.5°C. Each of these banks have committed to net zero emissions by 2050 while setting interim targets for specific sectors by 2030, but a new analysis from Ceres and the TPI Centre finds significant gaps in the 2030 targets necessary to achieve these global goals.   

U.S. Banks and the Road to Net Zero: Analyzing the 2030 oil and gas targets of the six largest U.S. banks focuses on the banks' 2030 oil and gas emissions reductions targets. All six banks have set targets in line with the Net Zero Banking Alliance's guidelines. The analysis seeks to present an apples-to-apples comparison of the ambition of the targets relative to widely accepted and scientifically informed low-carbon benchmarks.

The analysis extrapolates four key findings on the current state of target-setting practices and methodologies:

• The methodologies in use to quantify and establish targets lack sufficient comparability and transparent disclosure.
• The sector and emissions parameters applied to set targets are inconsistent and may not capture the full scope of emissions across the oil and gas value chain.
• The still-developing target-setting methodologies are leaving an array of material business activities outside of the scope of their targets, creating loopholes for banks to continue financing high-carbon activities.
• The report assesses each bank's target against TPI's oil and gas benchmarks, which are derived from the Sectoral Decarbonization Approach, a method for setting scientifically aligned emissions reduction targets. When benchmarked against a 1.5°C scenario, the analysis shows that none of the six banks' targets converge with that scenario by 2030.

The brief concludes with five recommendations to help banks improve their target-setting practices:

1. Expand target coverage to include all material on- and off-balance sheet activities, prioritizing activities with high financial and/or emissions exposure.
2. Ramp up the ambition of targets to be in line with limiting global warming to 1.5°C.
3. Substantiate the credibility of targets with a comprehensive transition plan.
4. Disclose the key assumptions and calculations used in emissions accounting and in target-setting.
5. Annually report progress in reducing emissions and methodological updates.

Media Contact: Becca Johnson

Original Publication

SOURCE Ceres