Four banks including HSBC and Standard Chartered have ditched efforts to meet Science Based Targets initiative (SBTi) validation over fears of fossil fuel financing.
It comes as the SBTi unveiled a new standard for 2024 that will require financial institutions not to finance fossil fuel projects.
Instead, the banks are using another UN-backed group Net-Zero Banking Alliance (NZBA) which allows them to finance fossil fuels as long as they cut emissions.
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A Standard Chartered spokesperson confirmed to Reuters that it had left the SBTi validation process as it failed to consider adequately “the transition (away from fossil fuels) of our clients and markets”.
The spokesperson added that Standard Chartered was seeking alternative third-party validation of its climate targets and that it was setting science-based targets through the NZBA.
An HSBC spokesperson said also said it was setting its emissions targets in line with NZBA guidance.
An SBTi spokesperson told Reuters that, following feedback, SBTi changed some of its requirements, allowing banks to continue to finance some fossil fuel projects if they are able to commit to emissions targets that have to be met near-term.
It will still require them to end the financing of fossil fuel projects that would weigh on their longer-term emissions targets.
“We cannot limit global warming to 1.5 degrees Celsius and mitigate the risks of climate breakdown without reducing our dependence on fossil fuels,” SBTi said in a statement.