The finance sector - particularly the banking, investment and insurance industries - has potential through its own business practices to facilitate and incentivize greenhouse gas emission (GHG) reductions by other corporate actors and to facilitate the global shift to a low-carbon economy. This PhD focuses on the commercial banking industry as the least-researched finance sector actor that has this potential. It is contended that such potential is manifest in two ways. First, in commercial banks’ own business practices they fulfill three key roles that affect climate change mitigation, namely: as risk assessors and risk managers; as lenders and financiers; and as profiteers and ‘middlemen’ in lucrative global carbon markets and renewable/low-carbon technology investments. Second, banks are in a unique position to influence other corporate actors’ business practices and GHG emissions through their roles as creditors, investors, advisers and heads of supply chains.
In recent years, industry literature has begun to investigate and understand the nexus between banks and climate change, and the associated potential for industry and economic change. Yet it is still a relatively unexplored area within the academy. Part of the reason is that this is a new area of inquiry with many of the positive actions taken by early mover banks occurring only since 2006/2007. Moreover, integration of climate change strategy into banks’ corporate governance and business practices is far from industry-wide. Therefore this is a study of ‘leading banks’ in relation to climate change.