What is at issue:
Crafting an audacious goal is a key part of the systems change methodology employed by the initiative, because it helps to unify the network of participants around an ambitious and impactful purpose, and to set an ambitious but desirable goal. Our draft audacious goal is:
By 2025, European and US bank lending is consistent with staying within a 2o-C global temperature increase.
Since October 2016 Positive Money has played a crucial role in the establishment, growth, and development of the 2º Lending initiative (previously the “Money Matters Initiative”). Following our interim report this short report outlines the progress made since then, including the completion of our research phase, the launching of our Network at the October Strategy & Design session in Aylesbury, and the resulting Initiative Groups that have been created to deliver a climate-positive banking system.
What's happening now:
Following the launch of these initiatives, the Core Team has been working hard to maintain momentum and engagement, with each Initiative Group having attracted a starting cohort and hosting its initial kick off meeting. To successfully deliver positive long-term impact on bank lending and climate change, it is imperative that these Initiative Groups now achieve the stability, energy, and capacity to be self-sufficient, and to effectively pursue their defining goals. Consequently, the next steps of the 2º Lending initiative as a whole will be to ensure this outcome.
June 2019 - The second Task Force on Climate-related Financial Disclosures (TCFD) second status report, which reports that the average number of recommended disclosures per company has increased by 29% from 2.8 in 2016 to 3.6 in 2018.
What we have achieved:
Completion of our Research Phase
Our initial research phase aimed at gaining understanding of how bank lending impacts climate change on a systemic level. To gain such a perspective it was essential that we surveyed the views of practitioners from across the banking and financial landscape, and from different levels of the system.
This extensive research process generated insights on the context of bank lending and climate change, the broad ecosystem of influencers active in this space, and possible change pathways through which to change the current banking paradigm and its adverse effects on climate.
Encompassing strategies that are aimed at both changing the existing system and building a new one in its place, participants then designed actionable initiatives to deliver this strategy:
An International Climate Bank – To design and establish a global financial services institution that offers full spectrum financing for climate initiatives around the world with the greatest potential for GHG drawdown. The institution would work through intermediaries to aggregate 2°-aligned projects in sectors such as transportation and agriculture.
2° City Finance Lab – To create an accelerator for those jurisdictions on the brink of establishing cutting-edge strategies and institutions for financing a climate-safe economy, including new regional and local public and community banks. The 2° City Finance Lab will work with innovators in 2-6 cities or regions to build new climate-positive banking systems serving local economies and facilitate divestment from fossil fuels and banks that continue to support them.
ON3 Campaign – To launch a public campaign among key bank influencers and stakeholders that asks commercial banks to eliminate all new fossil fuel financing within three years. The campaign will highlight the human health impacts of climate change, and create an early-adopter club of banks committed to eliminating fossil fuel lending.
Bank Decarbonization Charter – To create a global charter to be signed by all large banks (GSIB, DSIB) that commits them to:
- a year-on-year 20 percent reduction of CO2 concentration on balance sheets and on gross new lending;
- a corresponding increase in allocation to climate positive solutions;
- a reporting framework;
- and, in time, a move to achieving the Sustainable Development Goals (SDGs).