Banks are Still Finding Their Footing on ESG
If it seems like you're hearing a lot more about environmental, social and governance (ESG) issues in banking these days, it's not your imagination—the topic has rapidly gained prominence across the industry in 2021 and will likely become even more important in years to come. The growing focus on climate risk has spurred banks (and their regulators) to more closely examine their environmental exposures—how rising sea levels and changing weather patterns might affect their existing loan portfolios. They're also reconsidering their support of companies and projects that generate substantial carbon emissions. Amalgamated Bank, based in New York, is part of a consortium of banks that disclose the greenhouse gas emissions of their loans and investments. A bank executive told Lawler that close to 25% of its loan portfolio is directed toward climate solutions, and the percentage may go up. “We have a bounty of clients looking to solve the world’s problems and looking to partner with us,” the executive says.