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Publication
Banks and financing the transition: faster, higher, stronger?
June 2025
Publication
Banks and financing the transition: faster, higher, stronger?
Review of the banking sector resulting from the CIA 2024 campaign
To achieve zero net emissions worldwide by 2050 (NZE 2050 scenario), the International Energy Agency (IEA) estimates that by 2030, worldwide, $4.5 trillion must be allocated annually for the development of decarbonized energies. Even in the less ambitious Announced Pledges Scenario (APS), clean energy investment is expected to double in advanced economies and China, and triple for developing economies by 2035[1]. Added to this is the cost of restructuring transport, food systems, industry, shipping and, more generally, the low-carbon transformation of the entire economy. This transition requires investments that far exceed the financial capacities of public entities: the mobilization of private players, and banks in particular, is necessary
In addition to accelerating the transition, it is also necessary to reduce fossil fuel consumption to meet the targets set by the Paris Agreement. However, projected fossil fuel emissions from existing infrastructures could take the world above 2°C warming in a few decades. New funding for such infrastructure is therefore incompatible with the objectives of the Paris Agreement, and current funding must be phased out in line with decarbonization trajectories aligned with the 1.5°C target. Banks play a major role in financing fossil fuels, as such their responsibility to transition into a low-carbon economy is at the heart of the climate debate[2].
In recent years, the banking sector has attempted to align its activities with climate objectives through voluntary actions such as the Net Zero Banking Alliance (NZBA), launched by the UN in 2021. However, several studies[3] reveal that they are not on track to meet their targets.
This study, based on quantitative and qualitative data, assesses banks on the current contribution of their financing to the transition, and on the reliability and consistency of their decarbonization strategy.
With the contribution of
Laurent Morel
Partner
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