"2022 Financial System Benchmark", 8 Nov 2022

This benchmark provides insight on the disclosure and transparency of interconnected institutions within the global financial system; banks, insurance companies, pension funds, asset managers, sovereign wealth funds, development finance institutions and investment consultants. All 400 institutions in the benchmark either directly or indirectly influence people and planet and the flow of money in and across developed and developing market economies. The benchmark covers governance, planetary boundaries and human rights and social issues.

The financial system is global, money flows across borders – and financial institutions have a responsibility to address global sustainability transitions. However, despite global commitments, significant work is needed by financial institutions across all measurement areas to operationalise these commitments...

KEY FINDING [...]

Only 20% of financial institutions publicly acknowledge their impact on people and planet. This is a minimum requirement for financial institutions, as without acknowledgment they are unable to put processes in place to identify and manage the impact they have, set targets and monitor progress.

KEY FINDING [...]

Only 37% of leading financial institutions assessed have disclosed long-term net-zero targets. Disappointingly, of these commitments only 2% have been translated into interim targets applied across the institution’s financing activities, of which only 1% are backed by scientific evidence...

KEY FINDING [...]

Financial institutions have an important role to play in human rights due diligence when financing and investing in companies. Outside of the minimum legal requirements, less than 7% of the 400 institutions assessed disclose the process they have in place to identify human rights risks and impacts within their own operations, and less than 3% within their financing activities. It is therefore impossible to see if they are fulfilling their role managing and incentivising businesses in their portfolios to operate ethically, even at the most basic level. As the finance sector acknowledges its role in the climate transition, there is much work to do in its contribution to the social transition.

KEY FINDING [...]

Whilst 80% of assets held by leading global financial institutions are based in OECD countries, these assets can and should flow across borders globally. Given only 2% of financial institutions disclose their financing to low-income countries, 14% to excluded groups and 23% to small- and medium-sized enterprises, there is virtually no or limited transparency to understand the extent or lack of progress...

KEY FINDING [...]

Less than 5% of financial institutions assessed acknowledged they had a process to identify the impact of their financing activities on nature...