Research: 88% of Top Global Banks Unprepared for Climate-Related Disruptions

First-of-its-kind Report Ranks 50 of the World's Largest Commercial Banks on Climate Adaptation Maturity; US and Australian Banks Lag Behind

Research: 88% of Top Global Banks Unprepared for Climate-Related Disruptions

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Climate X, a leader in climate risk data analytics, today announced the findings of its first-of-its-kind report, The Top 50 Banks in the World Tackling Adaptation 2024, conducted in collaboration with Climate Proof. This report ranks 50 of the world’s largest commercial banks based on their climate adaptation maturity, evaluated across 17 key indicators. The analysis reveals a significant gap in preparedness, with 88% of the top global banks failing to adequately address climate adaptation risks.

Despite growing awareness, only 7 of the top 50 banks assessed meet more than half of the climate adaptation criteria, and none meet all criteria. The report also highlights regional disparities, showing that European banks lead in climate adaptation, while banks in the U.S. and Australia lag, with many ranked at the bottom of the list.

Top Ranked Global Banks by Climate Adaptation Maturity

• Standard Chartered PLC (UK)
• Banco Santander SA (Spain)
• Banco Bilbao Vizcaya Argentaria SA (Spain)
• UniCredit SpA (Italy)
• Sberbank of Russia (Russia)

Lowest Ranked Global Banks by Climate Adaptation Maturity

• Japan Post Bank (Japan)
• Morgan Stanley (US)
• Goldman Sachs Group Inc. (US)
• Capital One Financial Corp (US)
• U.S. Bancorp (US)

Link to full ranking of the top 50 banks by climate adaptation maturity here.

Lukky Ahmed, CEO of Climate X, said: “As the climate crisis accelerates, the ability of banks to help clients better understand and manage physical climate risks is critical to long-term economic stability. Our research shows that, despite increasing awareness, many banks are still falling short in implementing robust climate adaptation strategies. It is vital that banks incorporate adaptation into their strategic decision-making processes and develop products and services that support resilience.”

“This ranking sheds light on significant transparency and action gaps across the banking sector,” said Kamil Kluza, COO of Climate X. “While a handful of institutions are making strides, the vast majority lack evidence of clear metrics and strategies for supporting communities and businesses affected by climate-related disasters. With climate inaction potentially costing up to 20% of cumulative global GDP by 2100, banks will need to take a leadership role in driving adaptation financing to ensure that businesses and economies can withstand the challenges posed by climate change.”

Methodology

The ranking was conducted using a proprietary methodology that evaluated the adaptation maturity of banks across 17 qualitative indicators, grouped into three categories:

• Think: Strategic alignment and assessment of physical climate risks.
• Do: Implementation of adaptation measures and strategies.
• Track: Monitoring, reporting, and transparency of adaptation actions.

Climate X analyzed the latest public disclosures from each institution, focusing on annual reports. A large language model (LLM) was employed to measure alignment with the indicators, providing a comprehensive overview of each bank's readiness to manage climate risks. The full methodology is available inside the report.

Operational Manual For Climate Risk Management

In addition to the Top 50 Banks in the World Tackling Adaptation report, Climate X has published the Operation Manual: Climate Risk for the Banking Industry, a comprehensive guide for financial professionals to better identify, assess, and manage climate risks. The manual offers actionable tools and insights into physical climate risks, equipping institutions with knowledge to close the adaptation gaps. It provides essential learning materials, such as key characteristics of climate risks, and offers links to more detailed resources that financial institutions can implement to support resilience.

About Climate X

Founded in 2020, Climate X is a leading climate risk data analytics company, helping organizations better understand and respond to the impacts of climate change. Using advanced technology, Climate X provides insights into future climate risks through its platform, which creates digital twins of real-world assets. By analyzing 500 trillion data points, the platform enables customers—including banks, mortgage lenders, and real estate firms—to assess and manage the risks climate change poses to their assets and business operations. For more information, visit www.climate-x.com.

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