Banks Start Dropping Clients to Dodge Costs Tied to ESG Risk (2)

European banks are beginning to drop clients that pose a climate risk rather than face the possibility of higher capital requirements, according to the watchdog overseeing the development.

Banks are raising prices, denying loan requests, “de-selecting industries and in some cases clients,” said Jacob Gyntelberg, director of the economic and risk analysis department at the European Banking Authority.

There’s already evidence that upstream oil and gas projects are falling out of favor as banks move beyond coal exclusions. That’s amid growing pressure on the finance industry from regulators and investors to shift over to low-carbon intensity sectors. At the same ...