Border to Coast, Royal London Asset Management and Friends Provident Foundation have launched a new set of expectations for the banking sector in order to ensure a just energy transition.
The new set of investor expectations has been launched as part of an ongoing engagement with four UK lenders, Lloyds, Barclays, NatWest and HSBC.
It is part of Border to Coast’s wider just transition initiative which the £50bn pool launched last summer.
The latest guidance is aimed at encouraging the banks to either introduce a standalone just transition plan or explicit incorporation of just transition into existing climate plans. The investors are keen to ensure that banks mitigate social risks, seek social opportunities, and a focus on place-based impacts as the global economy adjusts to the the energy transition.
To date, two of the banks in question have already committed to taking the requested action, a third has included just transition ambitions in its net zero plan, and the fourth has stated support for just transition principles, the investors said.
Colin Baines, stewardship manager at Border to Coast, said: “We are pleased with the positive response our engagement has received to date and the commitments leading banks have made. As ambition is turned into action, we will use our investor expectations to engage and assess their emerging plans.”
For mortgage portfolios, this could mean ensuring that decarbonisation is achieved without excluding customers and mitigating ‘stranded customer’ risk.
It will also include the development partnerships with public banks and community development finance institutions to provide blended finance solutions to support place-based just transition.
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