AIB has set a target for green lending to account for 70 per cent of new customer advances by 2030, including financing for energy-efficient homes, electric vehicles and renewable energy projects.
This means financing activities that will help decarbonise the economy and supporting customers to transition to a low-carbon economy, AIB said at the outset of the third Irish Climate Finance Week conference, which it is sponsoring.
The bank, led by chief executive Colin Hunt, has also set a deadline for achieving so-called net-zero carbon emissions from its own operations by the end of the decade.
During 2020, AIB launched a €300 million social housing fund to deliver 2,000 sustainable A-rated homes and lent €245 million in green mortgages at discounted rates to help customers buy energy-efficient homes.
Venture
In September, it became the first Irish bank to venture into the burgeoning green bonds market, raising €1 billion of capital to support lending towards renewable energy projects and green buildings.
The bonds will be ringfenced capital reserves to underpin the bank’s existing €1.7 billion green-loan portfolio, which comprises green commercial buildings and renewable energy projects in Ireland and Britain, and as well as additional green lending.
“Managing climate change is the most important challenge facing this generation and the role of finance in supporting the transition to a low-carbon economy is pivotal,” said Mr Hunt. “When I became chief executive last year, I put sustainability at the heart of AIB’s strategy.’’
AIB became the first Irish bank to pledge to operate as carbon neutrally by 2030, using a “net-zero’’ approach. “That means cutting greenhouse gas emissions to as close to zero as possible – through elimination of carbon rather than offsetting it,” it said.
The bank said that it has cut its direct emissions by 40 per cent since 2014 including additional initiatives such as reductions in the use of water, waste and paper; transition to the use of renewable energy; and the removal of all single-use plastics starting with head office location.
"AIB is clearly putting sustainability at the heart of its strategy and with climate-related investment likely to form a central part in the Government's soon-to-be published national medium-term development plan," said Goodbody Stockbrokers analyst Eamonn Hughes, referring to an economic plan that the Government is working on to help the Republic "recover and prosper post-Covid and the Brexit transition".
The Government set out a bill early last month, aimed at reducing the State’s emissions by 7 per cent a year over the next decade, with an aim of becoming carbon neutral by 2050. However, critics of the Climate Action Bill have said that the planned laws are weak – especially when compared with more robust laws like the UK climate Act – and fail to incorporate demanding national targets.
