Working group votes on whether to exclude portion of underwriting deals from net zero targets, but critics see ‘double standards’
Some of the world’s largest investment banks have been lobbying to exclude chunks of their underwriting activity from net zero targets, in a debate that threatens to slow their progress on decarbonisation. Banks in a standard-setting group led by Barclays and Morgan Stanley have been voting this week on how to measure the carbon footprint of such deals, according to people familiar with the discussions. Infighting over the past year has held up the publication of the first voluntary rule book on the issue, which had been due last November.
More than one-third of the $669bn of financing provided to oil, gas and coal companies in 2022 by the world’s 60 biggest banks was through underwriting bonds and equities sold on to investors, rather than loans made by the banks themselves, according to a tally by non-profits including Urgewald and the Rainforest Action Network. But bankers have been reluctant to acknowledge the climate impact of their underwriting work and have never agreed on how best to account for the carbon emitted as a result of this. Unlike loans, underwriting deals typically do not remain on their balance sheets for long....
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