New analysis by Greenpeace and the World Wildlife Fund has found that UK financial institutions were responsible for 805 million tonnes of greenhouse gases, ranking them ninth in the world for carbon emissions.

The research suggests that the financial sector should face similar scrutiny as the oil and gas industry, coal mining and aviation as a ‘high carbon’ risk. The banks are linked in the report due to them financing loans and projects which are responsible for the emissions, making the sector have a larger carbon footprint than Germany.

Greenpeace is now calling on the government to introduce stricter legislation to align financial activities with the UK’s climate commitments, rather than ‘greenwashing’ PR stunts and projects that shine positive light on the sector.

“Finance is the UK’s dirty little secret,” said Greenpeace UK’s executive director, John Sauven. “Banks and investors are responsible for more emissions than most nations and the UK government is giving them a free pass. How can we say we’re ‘leading the world on climate action’ while allowing financial institutions to plough billions into fossil fuel production every year? The claim is almost laughable.

“As the host of this year’s pivotal global climate summit, the government can no longer turn a blind eye. Rather than relying on self-regulation we need legislation that forces all banks and asset managers to align all financing activities with the goals of the Paris Agreement. That would be genuine climate leadership.”

The report, which was put together by climate solutions project developer, South Pole, in partnership with Greenpeace and the WWF found that the banks were responsible for carbon emissions that were 1.8 times the annual net emissions of the UK as a whole.

“The UK financial sector could be the first in the world to be aligned with the Paris Agreement targets – and reap the rewards as global business shifts towards clean, green investments,” said WWF chief executive, Tanya Steele. “But it’s clear voluntary pledges aren’t getting the job done. The UK Government must show the global leadership expected of the COP26 Presidency and commit to mandating all financial institutions to have net zero transition plans that cover their investments in every corner of the globe.”