"Since signing the Climate Commitment in 2019, the financial sector has taken significant steps to contribute to the energy transition. All signatories now have an action plan. The sector is taking its responsibility to play its role in the transition structurally. For the continuation of the commitment, there is broad consensus among the signatories to shift our focus, with the action plans in hand, to finance the transition in order to increase our impact on making the real economy more sustainable."
So says Jack Julicher, chairman a.i. of the Financial Sector Climate Commitment Committee and successor to Femke de Vries, in an explanation of the third Climate Commitment progress report that the sector presented late last year to outgoing Minister of Finance and Minister of Climate & Energy. The cabinet shared this progress report with the House of Representatives on Thursday, Feb. 8. All financial institutions have now published an action plan. 94% of the institutions have taken action(s) based on their action plan, according to the report. 69% of the financial institutions that are part of the Climate Commitment say they are "on track" in terms of their CO2 reduction targets.
The emphasis of institutions is on positively stimulating the energy transition. This is done, for example, through engagement (making agreements on sustainability in discussions with corporate clients) and by voting at shareholders' meetings. In addition, more and more polluting sectors and companies are being excluded from financing and investments are increasingly being made in green sectors.
Further improving reporting
Institutions report on their funded emissions, but do not yet do so for all relevant investments and loans. The goal is to measure climate impact across all relevant financings. In accordance with the Guidance, in principle all financings are relevant except when carbon emissions are negligible. In 2022, 91% of the portfolio was classified as relevant.
Banks need complete and consistent datasets to make visible how the sector is reducing its funded emissions year-on-year. The sector expects the reporting requirement for companies (in line with the European CSRD Directive) to ensure improvement.
Effective interplay between government, financial sector and real economy
The energy transition requires effective interplay between government, the financial sector and the real economy. The sector will benefit from government instruments that focus even more on standardizing and pricing emissions and subsidizing the transition in the real economy. The sector also wants to engage in public-private partnerships through "blended finance.
Since 2019, 52 financial institutions and four industry associations have been working to implement the Climate Commitment. Banks, pension funds, asset managers and insurers are contributing to both the Paris Agreement and the Dutch Climate Agreement through the commitment.
View the third progress report and offer letter here
This is a joint press release from DUFAS, Dutch Banking Association, Pension Federation and Association of Insurers
