With COP26 approaching, the past few months have seen a surge in the number of banks committing their lending and investment portfolios to net-zero targets. Activity is concentrated among listed banks. As of now, the total assets of net-zero aligned listed banks amount to $51 trillion, accounting for 38% of global listed banking assets and representing 93% of global net-zero aligned assets.
Progress, however, is uneven across geographies. European banks lead the way, having committed about 80% of listed banking assets to net-zero targets, followed by North America at 56%. Latin America, Asia Pacific, and Middle East and Africa made slower progress, with only 29%, 11% and 1% of their listed assets being currently aligned.
As more institutions pledge to reach net-zero financed emissions globally, borrowers that accelerate their decarbonization efforts and incorporate carbon disclosure practices are likely to gain preferential access to capital across geographies.