Banks ask investors to look past an ESG metric

New hurdle: A tram drives past the European Central Bank building in Frankfurt, Germany. Europe’s lenders are expected to fall short on a new ESG requirement that came into effect this year. — AP

Brussels: Europe’s banks are asking investors not to pay too much attention to a new green metric due to be published in in the coming weeks, as early estimates show the industry woefully behind where it needs to be.

The Green Asset Ratio (GAR), launched by the European Banking Authority (EBA) in 2021 with a deadline for 2024, measures the percentage of assets that aligns with the bloc’s list of sustainable business activities.