AIB is to begin categorising its lending activities and loan book on the basis of sustainability. The move comes on foot of new guidelines from the European Banking Authority which require banks to be more transparent about the climate impact of their business activities.
AIB said the new measures, being rolled out over two years, would categorise its lending activities as either “green’’ or “transition’’ – in other words, relating to activities that contribute to the transition to a net-zero carbon economy by 2050 – for internal tracking and external disclosure purposes.
The bank said the move would ensure that lending is “increasingly targeted towards” activities that help reduce carbon emissions, and would help it achieve a target of having 70 per cent of lending as either green or transition by 2030.
AIB’s lending to renewables and green buildings rose to €1.46 billion last year compared with €1.2 billion the previous year. Last year, it became the first Irish bank to pledge to operate on a carbon-neutral basis by 2030.
"We are playing our role in supporting the drive towards decarbonisation by accelerating the rollout of products and services that assist our customers in reducing their carbon emissions," AIB chief executive Colin Hunt said.
“There is widespread public support behind the drive to limit global warming and our own research shows almost half the population thinks Irish businesses hold responsibility to drive change,” he said.
The bank has also introduced an environmental, social and governance (ESG) questionnaire to help assess ESG risk for large borrowers in some sectors.
The changes come against the backdrop of the European Union's drive to combat climate change by ending economic reliance on fossil fuels and to reduce average emissions by 55 per cent by 2030, falling to net zero by 2050. They also give effect to new EU banking regulations promoting greener lending as the European Central Bank prepares to stress test all euro-zone banks in 2022 against their ability to withstand climate-change risks.
