methodology
The Sustainable Power Policy Tracker uses a consistent and transparent scoring grid to assess the commitments taken by banks to support the generation, transmission, and distribution of sustainable power.
What does the Sustainable Power Policy Tracker assess?
This tracker currently covers the world’s top 60 banks. Banks have been identified thanks to the S&P Global Market Intelligence ranking from April 2023. Banks with little-to-no league credit for economy-wide financing were not selected. Eventually, more banks and other types of institutions (insurers and investors) might be integrated in the tracker.
The Sustainable Power Policy Tracker is a work in progress. Its methodology will evolve over time and it will be continuously updated whenever new commitments are published or existing ones are modified. The assessment is based on public documents issued by financial institutions such as sectoral policies, climate analytics and ESG reporting, specific web pages and press releases.
Each bank was invited to respond to a questionnaire before the initial publication, in September 2023, and we welcome comments on an ongoing basis.
Commitments are rated according to five main criteria
For each criteria, the score range from 0 (worst) to 5 (best) with a color code (from red to green) to quickly identify the overall quality of commitments. Special mark-ups and indicators are used to provide additional information.
#1 Sustainable power scope
The first criterion addresses the scope of financing for the energy transition: banks should avoid supporting unsustainable solutions and not be limited to power generation, by integrating electric networks and energy storage in the scope.
#2 Financial target
The second criterion evaluates the commitment to achieving a financial target dedicated to the power sector: it should be set at the group level, within a coherent timeframe and guarantee a significant impact on the bank’s activity in the energy sector.
#3 Financing Ratio
The third criterion evaluates disclosure of the current energy supply financing ratio and the commitment to a midterm target for the ratio. It should cover the whole value chain of fossil fuels and include both direct financing (such as loans) and indirect financing (such as bond emissions).
#4 Transparency
The fourth criterion evaluates disclosure practices: reports should be updated annually, and should include the baseline and annual progress of the financial target, publication of a financing ratio, granular information regarding financial products and services mobilized, capacity and generation mix financed, and geographical distribution.
#5 Fossil power expansion
This highlights the financial institution’s position on the development of new fossil-fired power plants, more specifically on the support to companies with coal plants and gas plants expansion plans. A successful energy transition implies both phasing out fossil fuels and phasing in sustainable energy.
Disclaimer
Despite our best efforts, inaccuracies may have appeared in our tracker and we may have missed an existing commitment. Feel free to contact us: research@reclaimfinance.org, we will make every effort to address your feedback and make any necessary correction.
