Climate risk joins ethics in driving lending decisions

Barclays, BNP Paribas and others are analysing risk of climate change-related losses

A number of banks have reduced or stopped the funding of polluters in recent years. The reasons for such actions are complex, ranging from ethical concerns to political and shareholder pressure. Increasingly though, lenders are starting to think that it also makes good financial sense.

The 2015 Paris Agreement has raised the reputational costs of lending to carbon-heavy companies and accelerated a global move towards a low-carbon economy. But a newer pressure on banks to go green comes from the