Most of the largest commercial banks globally are falling short in implementing effective measures to climate-proof their operations and the businesses they finance, according to a Large Language Model ranking developed by Climate X and Climate Proof.
Despite an increasing awareness of climate adaptation, the ranking indicates that only seven of the world’s top 50 banks meet more than half of the climate adaptation criteria, with none achieving full compliance. The study also highlights that European and UK banks are performing relatively better than their counterparts in the US, Canada, and Australia, likely due to more stringent climate policies and frameworks in the region.
Leading institutions in the ranking include Standard Chartered, Banco Santander, and UniCredit, all of which exhibit more advanced engagement with climate adaptation strategies. In contrast, US banks occupy the lower end of the list, with Morgan Stanley, Capital One, Goldman Sachs, and US Bank ranking the lowest.
Lukky Ahmed, CEO of Climate X, stated, “Climate adaptation is no longer a choice for the financial sector – it’s a necessity. Our ranking illustrates that while some banks are beginning to take measures to prepare for a hotter, more volatile world, the majority still have a long way to go. It is crucial for banks to integrate adaptation into their strategic decision-making and to develop products and services that promote resilience.”
The ranking employs a methodology designed to assess the adaptation maturity of banks through 17 qualitative indicators. Climate X analyzed the most recent public disclosures from each institution, particularly their annual reports, using a Large Language Model (LLM) to evaluate how well the banks aligned with the indicators, providing an overview of their preparedness for climate adaptation challenges.
“The methodology we used offers a clear picture of how these banks are advancing in their adaptation efforts,” said Kamil Kluza, COO of Climate X. “However, it also highlights significant gaps in transparency and action. Most banks are not establishing adaptation impact metrics, and few have definitive lending strategies that support communities and businesses affected by climate-related disasters.”
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