Full Title: Recalibrating the Role of Banks in the Energy Transition
Author(s): Elizabeth Harnett, Kaitlin Crouch-Hess, and Brian O'Hanlon
Publisher(s): Rocky Mountain Institute
Publication Date: September 5, 2025
Full Text: Download Resource
Description (excerpt):
We are at an important inflection point in climate finance. Net-zero aligned targets set with good intentions are now met with challenges from all sides — technical, economic, legal, and reputational. While some fear a retreat in ambition, we see this as an opportunity to check our assumptions, ask better questions, and ultimately chart a new path forward. We need a recalibration — one that will ensure that the role of banks in the energy transition is rightsized to focus on deals, not just disclosure.
In the last decade, banks have overhauled governance, launched net-zero strategies, and built internal capability at speed. Climate has moved from the margins, now enjoying board-level oversight and increasing attention from supervisors, shareholders, and clients. Banks are adept at answering questions such as: What is your portfolio emissions footprint? How is your strategy aligned with net zero? What are your main physical climate and transition risks?
But while momentum and expertise have grown, the impact on the real economy remains limited. Emissions continue to rise and clean infrastructure buildout is facing significant economic and political headwinds. If the point of commitments and targets was always to see finance flow to the transition, then what if the better question is: What is stopping the transition-enabling transactions from happening?