The banking sector is the largest component of the financial system and given its pivotal role as an interlocker to the real economy, it has a particularly important role to play in delivering a just transition. A growing number of commercial banks are beginning to reflect a commitment to the just transition in their climate policies, but the geographical coverage needs to embrace more banks in the Global South. All parts of banking balance sheets need to be positioned for the just transition, not least housing finance, corporate lending and finance for micro-, small- and medium-sized enterprises (MSMEs), including targeted efforts for female entrepreneurs.

The Just Transition Finance Lab team has a track record of producing research specific to the banking sector and the role banks can play in supporting a just transition.