Britain’s banks never cared about net zero

Several weeks ago, just in advance of Donald Trump’s second presidency, there was a mass withdrawal of US financial institutions from Mark Carney’s Net Zero Banking Alliance – which committed members to adopt policies of reducing lending to fossil fuel companies and to take other measures aimed at reducing carbon emissions. Are UK banks now preparing the ground to do the same? The senior executives of Barclays and NatWest have decided that they would rather that their annual bonuses were not based on climate targets. Both have removed sustainability metrics from the formulas used to determine the size of their bonuses.

Although both banks will still use climate targets in some capacity in long-term incentive schemes, and will remain members of the Net Zero Banking Alliance for now, it marks a reversal in a process which until recently seemed to be leading inexorably in one direction. It is perhaps also born of a realisation that US banks could well end up with the fossil industry all to themselves.