In February, the world’s first climate lawsuit against a commercial bank was taken out when a group of non-governmental organisations (NGOs) sued BNP Paribas for failing to comply with France’s duty of vigilance law. The lawsuit contends that the bank failed to take sufficient action to end fossil fuel financing.
Observers have not ruled out the possibility of similar legal actions occurring, as NGOs look to hold banks accountable over climate change and sustainability issues. But how can banks ensure that the projects they finance via products such as green bonds and sustainability-linked loans (SLLs) are sustainable and that their clients are not ‘greenwashing’ in order to gain financing?
