ABN AMRO commits to develop an absolute emissions backstop by 2030

An absolute emissions target focuses on reducing the total amount of greenhouse gases emitted, whereas an intensity target measures emissions relative to a unit of activity, such as revenue or energy produced, meaning emissions can become more efficient while still rising overall. While carbon intensity targets can help improve the overall energy efficiency of portfolios, they do not necessarily lead to a reduction in total financed emissions. At a time when the impacts of climate change are becoming increasingly visible through events such as prolonged heatwaves across Europe and the UK, reducing absolute emissions is essential if the financial sector is to contribute meaningfully to limiting global warming. 

In a recent World Economic Forum article co-written with the Head of Group Sustainability of Nordea and the Chief Economist of Triodos, ABN AMRO Chief Sustainability Officer Sandra Phlippen emphasised the necessity of a more impactful approach to decarbonisation in the banking sector, stating that “most European banks have detailed their climate strategy up to 2030, but not beyond. At the same time, virtually all these banks have committed to net zero by 2050. Our sector needs to consider its strategy for the two pivotal decades ahead of us.” 

The shift to absolute emissions targets has been welcomed by civil society groups such as Friends of the Earth Netherlands (Milieudefensie) and will be reinforced by the development of an ABN AMRO Climate Finance Framework. Tailored to our sectors, the framework will help direct capital towards activities that support the energy transition, recognising that the financing decisions banks make today will play an important role in shaping the resilience of our economies to the growing impacts of climate change in the decades ahead.