Financial institutions call on German companies to set climate targets ahead of COP26

A month ahead of the international climate conference COP26 in Glasgow, 220 financial institutions call on 1,600 companies to define solid targets to reduce their greenhouse gas emissions, Frankfurter Allgemeine Zeitung reports. The group of international financial companies, which manage assets amounting to 29.3 trillion dollars in total, includes the German insurer Allianz SE and investors Union Investment and Deka Investment, FAZ writes. The letter, which calls on companies to set reduction targets in line with the goals of the Paris Agreement, is addressed to, among others, 30 German companies, including chemical company BASF, airline Lufthansa, steel company Salzgitter and real estate company Vonovia. "Capital is raising its voice," said Alberto Carrillo Pineda, head and co-founder of the Science Based Targets (SBT) initiative, the organisation responsible for the campaign in cooperation with non-governmental organisation Carbon Disclosure Project (CDP). The call from global financial institutions is loud and clear, Pineda said: a CO2-neutral business model is the only sensible choice as the basis for a climate-proof and prosperous economy.

There is still a long way to go, says Laurent Babikian of the CDP, pointing to the Intergovernmental Panel on Climate Change’s (IPCC) latest alarming report. Banks in particular have a lot of catching up to do, he adds: Among the 220 financial institutions that have joined the call, there are only seven banks. The problem lies above all in the complexity of calculating emissions. For example, tracking the amount of "financed emissions" would mean calculating the carbon footprint for every loan, every bond and every investment. The SBT campaign intends to help the banks in this process, FAZ writes.