The Green Asset Ratio proposed by the European Banking Authority is to be established in 2022. This indicator should show in which financial activities in banks’ balance sheets are related to activities that are in line with the Taxonomy Regulation, the objectives of the Paris Climate Agreement and the European Green Deal. Particularly , the Green Asset Ratio is supposed to become a major indicator of how far banks are moving away from financing activities related to the use of fossil fuels, and how quickly they are moving towards green investments. So already this year, banks have to prepare a lot for collecting and monitoring the required data.
However, despite the latest tendencies 60 biggest banks of the world still provide financing for fossil fuels according to the Banking on Climate Chaos – Fossil Fuel Finance Report 2021.
“One bank after another is making solemn promises to become ‘net zero by 2050’,” said Johan Frijns, at BankTrack, part of the coalition behind the report. “But there exists no pathway towards this laudable goal that does not require dealing with bank finance for the fossil fuel industry right here and now.”