Food shortages, new patterns of diseases, extreme heatwaves and unexpected floods. These incidents — once the domain of alarming reports — have become mainstream news as increased climate impacts become commonplace among communities around the world.

To secure a more sustainable future, all segments of the economy and society will need to do their part.

In addition to governments, corporations and individuals, financial institutions play an important role. They are enablers of actions required to mitigate climate change; the transition towards a green economy will require major investments. Financial flows and focus must also be steered towards climate risk assessments to ensure responsible economic activity and encourage the shift to sustainable businesses.

So, where are banks on this journey of (climate) change and what are they disclosing in their annual reports? Read key findings from our latest study, which analyses the climate-related disclosures of 35 major global banks in their 2021 annual reports. The banks span Asia, Australia, Canada, Europe, Britain and the United States.

A closer look at climate reports

Our analysis of major banks’ latest annual reports notes significant commitments to sustainable finance. However, metrics and targets remain vague. Four in five banks disclose information on their metrics and targets in the annual reports, but the nature and extent of information disclosed varies significantly.

In the area of sustainable finance, banks have disclosed significant targets ranging from a few billion to US$1 trillion by 2030. Yet it is unclear where they see opportunities in the medium to long term. Banks are also less transparent about their progress towards achieving their targets, with only 49% providing quantitative disclosures about their progress to date.

Delve into key findings from our report below.

Progress of banks' climate-related disclosures in 2021

A snapshot of banks' climate-related disclosures in 2021

Delving into the details

Increase of sustainability disclosure requirements

The focus on climate-related disclosures is not going away.

In June 2021, the Monetary Authority of Singapore announced that it was working on mandatory climate-related financial disclosures for financial institutions and listed entities to align them to a single international standard. The move is part of a concerted effort to enhance the quality and consistency of climate-related disclosures.

In March 2022, the International Sustainability Standards Board (ISSB) released two proposed International Financial Reporting Standards’ (IFRS) Sustainability Disclosure Standards.

The ISSB’s proposals would require climate-related disclosures to be made as part of a company’s general purpose financial reporting. They also emphasise the importance of connectivity between financial statements and other information on climate-related matters.

Now more than ever, it is critical that institutions take a proactive approach to climate-related disclosures, providing transparency and consistency for investors and the wider stakeholder community.

Read our full report for more insights.

Contact us

Our team of specialists at KPMG IMPACT offers guidance on sustainability disclosures and climate-related targets and metrics.

Cherine Fok

Lau Kam Yuen

Partner

Sustainability Services

KPMG IMPACT

Cherine Fok

Cherine Fok

Director

Sustainability Services

KPMG IMPACT