Reiterating its opposition to “efforts that would force banks to lend to designated favored entities or that would discourage or prohibit banks from lending as a way to indirectly regulate or restrict certain activities or businesses,” the American Bankers Association today submitted comments related to proposals on voluntary disclosure standards for nature-related issues and net-zero climate transition efforts.
The proposals by two international working groups — the Task Force for Nature-related Financial Disclosures and the Glasgow Financial Alliance for Net Zero — reflect a growing interest worldwide in nature-related issues by not only activists, but also financial institution regulators. However, in a letter to both groups, ABA said “the proposals are based on the conceptually flawed assumption that financial institutions are able to drive outcomes within the real economy, whether they be specific nature-positive outcomes or net zero emissions targets of their clients.”
ABA stated that “banks’ primary role is to support their clients by facilitating and financing the real economy transition activity of those enterprises, rather than dictating or creating these activities.” The association also noted the various complexities in nature-related transition issues, concluding that voluntary frameworks should have no role in regulation.