A report has accused 39 banks of vaguely worded policies and a failure to meet international standards.
The international banking sector is failing to prove how its sustainable finance policies translate into action, according to a new report.
The report, by WWF and BankTrack, an international network of 30 NGOs that monitors the financial sector, compiles findings drawn from examinations of the sector's environmental and social policies and shows that even in the few cases in which banks have adopted international policies, these are frequently aspirational and contain no proof of having been implemented.
The report, which is called Shaping the Future of Sustainable Finance: Moving From Paper Promises to Performance, ranked the financing policies of 39 international banks across 13 issue areas, ranging from climate change, dams and chemicals to fisheries and human and labour rights.
The banks studied included Deutsche Bank, Citigroup and HSBC. The study benchmarked the banks' policies against international norms, codes and standards and found that banks were failing to uphold environmental and social standards developed by UN agencies and other international bodies.
Research found that only two of the 39 banks had adopted policies that met all or most of the relevant international standards or best practices.
These were the Dutch bank Rabobank's adoption of the UN draft norms on human rights and HSBC's World Commission on Dams standards.
Jules Peck, co-author of the report and global policy officer at WWF, said: "The first step towards sustainable banking is to increase the transparency of the banks' policies. Generally, the banks in this report - even those leading the rankings - have vaguely worded policies and fail to meet international standards."
He added that the report now formed a blueprint that banks could no longer dismiss. "There's now no excuse for banks to say they don't want to consult 30 NGOs," he said. "Now, they don't have to. They can just go to this report - we've done all the work for them so there's no longer an excuse to be lazy."
Robert Napier, chief executive of WWF, said: "This report shows that the lack of transparent policies can not only result in the over-exploitation of environmental goods such as fisheries and forests, but also in increased financial risk to the banks, resulting in transactions being jeopardised."
The report recommends that banks report on their implementation by publishing annual sustainability reports in accordance with the Global Reporting Initiative.
"We take the findings of this study seriously," said a statement from the Royal Bank of Scotland Group, which on a scale of A to E scored D-minus. "We continue to conduct our business scrupulously in line with the laws and regulations laid down by governments and internationally accepted codes and standards.
"Indeed, we were one of the first international banks to sign up to the Equator Principles (a voluntary set of guidelines for managing social and environmental issues). In addition to our existing framework, including the annual RBS Group Corporate Responsibility report, work is in hand to improve mechanisms for reporting on our implementation of the Equator Principles, as well as the social and environmental impact of the bank's activities."
Both WWF and BankTrack will distribute the report to all of the banks on the list and will be using it as part of their ongoing lobbying practice.