LONDON, Oct 22 (Reuters) - The world's biggest banks are ill-prepared for the effects of climate change and lenders are making insufficient effort to fund a transition to a low-carbon economy, an industry report said on Thursday.
Of the world's 10 largest banks, only Bank of China and Citigroup were among the top 10 ranked for climate management in a report by investment manager Boston Common Asset Management.
A major criticism of the banks surveyed was that many fail to assess adequately the climate change risk to their portfolios and no bank currently measures its carbon footprint.
"Banks are tied to every market sector through their lending practices, making them uniquely vulnerable to climate-related risk," Boston Common said.
"We believe banks are not adequately measuring, managing and disclosing these risks."
Governments around the world are preparing for the United Nations COP21 climate change summit in December, which aims to agree a deal to curb global greenhouse gas emissions.
A global transition to a low-carbon economy will cost around $4.8 trillion, according to estimates given by 55 countries to the U.N. ahead of COP21.
Banks have a critical role to play in funding this transition, but most lenders assessed do not have quantitative targets for increased financing of energy efficiency or renewable energy projects, the report said.
The top 10 banks as ranked by Boston Common according to their performance in risk management, climate change strategy and opportunities were:
Rank Bank
Country 1
Westpac Banking Corporation
Australia 2
National Australia Bank Limited
Australia 3
Toronto-Dominion (TD) Bank
Canada 4
Banco Bilbao Vizcaya Argentaria (BBVA (MC:BBVA)) SA Spain 5
Citigroup Inc (N:C)
U.S. 6
Bank of China
China 7
UBS AG
Switzerland 8
PNC Financial (N:PNC)
U.S. 9
DNB ASA
Norway 10
Itaú Unibanco
Brazil