A new study has found that while the biggest banks in the world have pledged to go green, these promises often amount to more talk than action. The Glasgow Financial Alliance for Net Zero (GFANZ) was created two years ago, with the goal of spending $130 trillion to tackle climate change. Financial institutions voluntarily pledged to ensure the companies they invested in reduced their emissions and align their lending policies with climate goals. However, a new report analyzing European banks found little evidence of substantive changes resulting from these promises.
The study found that banks in the Net-Zero Banking Alliance did not increase interest rates on loans to carbon-heavy companies and these companies were not more likely to set decarbonization goals. European banks had only reduced their lending to carbon-heavy sectors by 20% since 2018, regardless of their membership in the commitment. While a BloombergNEF report showed that banks in the alliance allocated more of their finance to clean energy, the findings of the study raise doubts about the effectiveness of voluntary climate commitments in reducing emissions.
Some large banks are also withdrawing from high-commitment climate pledges, as Republican backlash grows against investment strategies that incorporate environmental, social, and governance factors. The insurers’ climate alliance lost nearly half its members last year amid accusations of potentially breaking antitrust laws. JPMorgan Chase and State Street both pulled out of climate initiatives, citing the complexity of the climate challenge and the need for more nuanced approaches rather than simplistic commitments.
Investors are driving up the price of gold, which reached $2,364 per ounce recently. The surge is fueled by expectations of the Federal Reserve cutting interest rates and central bank purchases to diversify away from US dollars. Gold is seen as a safe haven investment during economic uncertainty and as a hedge against inflation. Central banks like China and India are increasing their reserves, driving up prices as they seek alternative assets in times of downturns in other markets.
Jessica Alba, the chief creative officer of The Honest Company, is stepping down from her role to focus on new endeavors. The company, known for its baby products and personal care items, reported a strong fourth quarter with revenue increasing by 10%. Despite this, the company’s stock has dropped significantly from its peak in 2021 and is not profitable. The Honest Company, which went public in 2021, markets a clean lifestyle through its products and aims to continue its growth despite challenges.
