2° Investing Initiative (2DII) has launched a climate scenario analysis tool for bank lending books, after a lengthy road test with 17 global financial institutions.
The move will see the think-tank expand its Paris Agreement Capital Transition Assessment (PACTA) methodology beyond equities and bonds, to offer financial institutions a “granular view of the alignment of their corporate loan books by sector and related technologies, at both the corporate client and portfolio level”.
Sectors covered by the platform include fossil fuel extraction, power generation, automotives and steel & cement.
It is hoped that banks will use the tool, which is free to use, to help steer their lending towards alignment with Paris-based climate scenarios, set climate targets and engage with clients.
Over the last two years, it has been trialled by a number of banks including: ABN AMRO, Barclays, BBVA, BNP Paribas, Citi, Credit Suisse, ING, Nordea, Santande…