Climate Responsibility in Banking: Useful Data Sources for Green Consumers (Chapter 8)

In episode 8 of Bank.Green's series, Katherine explains the key data sources Bank.Green uses to assess banks’ climate impact – she dives into the significance of financial statements, sustainability reports, and the Toxic Bonds database when examining your bank. If that sounds scary, she also highlights how to interpret these sources. Key takeaways: measurable data in these reports is crucial, as are clear policies and credible transition plans.

Recommended data sources for analysing banks

Anoushka: This week, we’re going to be talking about useful data sources that our viewers might want to look at and analyse for themselves. So, jumping straight into the first question, I’d love to know: what data sources do you recommend when analysing banks and their climate impact?

Katherine: Let me start by listing some of the data sources that we use at Bank.Green to rate banks. Some of them are pretty big, complex documents that require you to understand disclosure frameworks and standards. So I wouldn’t necessarily recommend them for novices, but I’ll start by telling you about the data sources we use, and then we can go into what I would recommend. We primarily use four or five main data sources.

Financial statements

Katherine: There are others that supplement our analysis, but the main ones are financial statements — or you can also refer to them as annual reports. That terminology differs somewhat depending on which jurisdiction we’re talking about. These are documents that every public bank will publish. They’re aimed at investors and are filed with the stock exchange if the bank is listed.

Just like other companies, banks invest a lot of time and effort into making sure that all disclosures are correct, because if the disclosures are incorrect, that’s really dangerous. You could be misleading investors or customers, and there could be serious penalties attached — in some cases, even criminal ones. So we know that this data can be trusted.

Those of you who watched the very first episode in the series will recall that we showed a table from Barclays’ annual report that broke down their lending by industry. We always look for that table. Sometimes it doesn’t exist — not all banks transparently disclose that kind of information — and consequently, they lose points according to our lending methodology.

So we’re always looking for a breakdown, or at least a description, of the sectors they invest in, or in this case, lend to. It can be quantitative or qualitative data, but that’s the main source of data that we use.

Sustainability reports

Katherine: The second biggest source is the sustainability report, also known as an ESG report or CSR report — or sometimes climate reports. There are many names, but essentially it’s a sustainability report.

First of all, we cross-check data between the annual report and the sustainability report, looking for inconsistencies. Sometimes that does happen. Sustainability reports are also a really good source of data on renewable energy lending, and that’s our primary source for that information. We also try to identify whether sustainable lending is grouped together, and if so, we separate out renewable energy lending, energy efficiency lending, and similar categories.

Toxic bonds database

Katherine: Finally, we look at two more major data sources. One is the Toxic Bonds Database. One way that banks continue investing in or supporting the fossil fuel industry is not just through lending, but also by investing in bonds issued by energy companies that finance new coal infrastructure and other fossil fuel projects.

This database shows energy companies, the bonds they’ve issued, and which banks hold those bonds. That’s a very important source for us.

Websites

Katherine: Lastly, we look at banks’ own websites, particularly for green products. When I say green products, I don’t mean renewable energy lending to commercial clients, but rather whether the bank offers things like preferential interest rates on loans to buy electric vehicles, solar panels, energy-efficient homes, or energy efficiency improvements.

Things to keep in mind

Katherine: There are also other data sources and bits of information we take into account. For example, if a bank has gone through a very rigorous B Corporation certification process and is certified as a B Corp, we look at that as well. That essentially confirms that a third party has assessed how the bank operates and given an independent seal of approval, showing that the institution is not driven solely by profit, but also cares about the environment and its people.

As I said, financial statements can be really difficult to read and interpret, but please do go ahead and take a look at them. Sustainability reports are easier to read – when they’re developed and published, they’re usually written with a much broader stakeholder base in mind than just investors. They’re more user-friendly and include a lot of visuals, so they’re easier to digest.

The bank’s website is also a useful source of information. Also, many publications, like The Guardian, is known for spotlighting Bank Greenwashing. So obviously there's the media coverage of banks that's also worth looking at. So those are the main ones that I would highlight for the purposes of this discussion.

What do these reports tell us?

Anoushka: Great, thank you. So it seems like there are a lot of climate-based reports, like the CSRD and the Toxic Bonds Report. I feel like you’ve already addressed this a little bit, but what do these reports actually tell us?

Financial statements vs. sustainability reports

Katherine: So financial statements are backward-looking, right? They tell us about the present state of affairs, or even the historical state of affairs. They’re drafted to a particular date, which we call a balance sheet date. So right now, in March 2025, most banks have just published their 2024 financial statements, and that shows us the state of affairs as at, say, December 31st, 2024. So they’re really helpful for understanding history.

They’re also helpful in showing us whether a particular bank is reducing or increasing its exposure to the fossil fuel sector year on year. They also help us understand whether commercial lending — so lending to commercial customers — is a small or large percentage of overall lending.

As I mentioned before, there are some banks that actually don’t lend to any commercial clients at all. They only do business with individuals, which is a very helpful data point in itself, because that means they’re not financing the fossil fuel industry, at least not directly.

They also give us absolute numbers. So if a small regional bank has, I don’t know, £50 million or dollars of outstanding lending to commercial organisations, they’re not going to be financing a pipeline, right? Maybe a local petrol station — or gas station if you’re in the US — but it’s not going to be a pipeline. So again, those data points are really helpful, and we take all of this into account in our rating process.

What sustainability reports tell us is something quite different. They’re much more forward-looking. They tell us about banks’ aspirations, their targets, and their desired decarbonisation pathway — essentially how they plan to green their portfolio.

So they’re more aspirational and not as rigorous in terms of numbers, although sustainability reports are definitely trending in that direction. Ultimately, the goal — and what regulators are pushing towards — is that these reports become integrated. So very often now you’ll see a single integrated report that brings together financial statements and sustainability disclosures.

So the focus is different, the audience is different, and the reports really complement each other. From our perspective, what we really look for is whether the bank is telling a coherent story. Does what they’re telling us about the future align with what’s actually happening now — or at least what was happening at the last balance sheet date?

What to look for in a bank's sustainability report

Anoushka: Great, thank you. And on that note, what should we look for in a bank’s sustainability report or on its website? What should we be looking for?

Katherine: Yeah, no, it’s a good question. I’d say look for detail. You can very easily tell a bank that is serious about greening its portfolio and meeting the goals of the Paris Agreement from one that is using its sustainability report purely as a marketing exercise for greenwashing purposes.

The good ones have a lot of detail. They will have greenhouse gas measurements, which means they understand their baseline and what they need to reduce. There’s a famous saying: you cannot manage what you can’t measure. If a bank has measured its impact on the planet, then we can actually believe their plan — if they have one.

That’s very different from a bank that talks about its goals but hasn’t actually measured its baseline. So look for detail. If the only thing a bank is doing is saying it’s set a net-zero 2050 target, that’s not good enough.

We need a plan. We need a plan for 2025 to 2030. We need milestones. We need sector-level plans, because each sector has a very different carbon intensity profile.

What we also don’t want banks to over-index on is small details. We talked about this in the episode on greenwashing — things like paperless statements. That’s a red herring. It’s neither here nor there. It’s a tiny aspect of a bank’s environmental impact.

What we really look for is evidence that the bank understands and has a grip on its impact on the environment, particularly from the perspective of energy sector financing. And we want a very robust plan to increase lending to renewables and decrease exposure to fossil fuels.

So we’re looking for as much detail as possible, backed up by credible measurement and data.

Most vs. least important factors in sustainability reports

Anoushka: Great, thank you. So my last question: reports sound like they’re quite long and quite lengthy, with a lot to sift through. What’s the most and least important thing to hone in on when addressing these reports?

Katherine: Once again — and I’ve said this before, but I’ll repeat it because it’s such an important point — look at the actuals. Look at the data. Don’t just look at aspirations.

Past data

Anyone can set a target, particularly a 2050 target, when the individuals signing it off are unlikely to still be with the organisation by then. So we look for statements of what has actually happened in the past, rather than what may or may not happen in the future under certain conditions.

Proof of robust transition plans

The second thing is to look for formal policies. Not just statements like, “Oh, we undertake to do X,” but actual policies. For example, a five-page policy approved by the board stating that the bank will not lend to an energy company that derives more than 5% of its revenue from fossil fuels.

Again, we’re looking for specificity. We want evidence that the board and senior executives understand climate risks — not just to the world, but to the company itself — from continued support of the fossil fuel industry.

We look for high-level buy-in, governance structures, committees, reporting processes, and data collection, and then how all of that feeds into a robust transition plan.

A transition plan might not be a term everyone is familiar with, but it’s becoming increasingly important. Most large banks have now measured at least some of their carbon footprint and set certain targets. There’s still a long way to go, but at this point we really need detailed transition plans to move away from fossil fuels and towards a cleaner future.

If a bank has a transition plan in place, that’s strong evidence that they’re genuinely on the path to where we need them to be in terms of environmental impact.

So: actuals, not aspirations; formal policies rather than vague statements; governance; and specificity — numbers, facts, and data.

Until next time!

Anoushka: Awesome. Great, thank you so much, Katherine. That’s everything from me, and that’s the end of our eighth episode in this series, where we analyse useful data sources. Hopefully our viewers now have some clear takeaways on which sources to use and what to look for in them.

Cool. See you next time.

Katherine: Thank you so much. You too — good to see you. Take care. Bye-bye.

Want more of the series?

Return to Chapter 7: Banks' Efforts to Decarbonise