Bank / Credit Union

Majority of EU banks not meeting green standards

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January 24, 2024

A majority (nine out of 10) of the European Union's biggest banks aren't doing enough to move away from fossil fuels, according to a study by the European Central Bank. The central bank said that banks that don't take this issue seriously could go insolvent, according to a report by Euronews.

"Among the 95 significant institutions analyzed, a staggering 90% are found to be misaligned," the study said, referring to the Paris climate change agreement.

In addition, seven in 10 may face lawsuits since they committed to the Paris deal, which could lead to insolvency for those with loans to fossil fuels. The European Central Bank said that the power sector is a big issue, as many companies are not investing enough in renewable energy.

The EU has a goal to cut emissions by 55% by 2030. Frank Elderson, vice chair of the ECB's supervisory arm, has in the past failed to sanction banks that ignore climate change concerns.

In addition, a study last year by RepRisk found that banks are increasingly engaging in greenwashing, a term for making misleading claims about green energy efforts.