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Banks are walking away from the climate promises they made. New research shows financial institutions globally are softening lending policies towards high-emission companies, reducing public disclosure on transition plans, and weakening net-zero commitments across their portfolios.
This matters because banks control capital allocation. When they retreat from climate targets, they signal retreat from decarbonisation across their funded industries. Less disclosure makes it harder to verify whether claimed commitments match actual behaviour – a textbook greenwashing risk.
The research doesn't specify which banks or which targets are being abandoned, nor does it name the verification framework used to measure "weakening". That's a problem. Blanket statements about "banks globally" obscure which institutions are genuinely stepping back, which are restructuring targets (sometimes legitimately, when science updates or scopes shift), and which are simply reducing headline noise while operational policy hardens elsewhere.
What's clear: if banks are reducing transparency around transition planning, verification becomes impossible. Regulators – particularly those pushing CSRD and TCFD compliance – are watching. The EU's proposed Corporate Sustainability Due Diligence Directive (CSDDD) will require financial institutions to disclose not just their own emissions, but their financed emissions and climate risk exposure. Voluntary retreat now invites mandatory disclosure later, often at higher cost.
The question isn't whether banks should have net-zero targets. It's whether current commitments were ever credible, or whether they were hedges against regulatory pressure that's now easing.
