Green banking charter on the cards

Top banks are facing a formal code of practice

Leading banks could soon have access to a formal code of practice designed to minimise their impact on the environment, under a new plan being proposed by NGO The Climate Group.

Steve Howard, chief executive of The Climate Group, said he hopes the framework will be published in the next few months and will provide banks with guidance on how to deliver on emission reduction commitments and develop products and services to support the transition to a low carbon economy.

"Initial feedback from stakeholders across the sector has been extremely constructive and supportive," he said. "Important groundwork is nearing completion, but this is a long term process and everyone involved is keen to welcome other global banks and financial institutions into the initiative over the coming months."

The group is now actively seeking further members, although has not yet disclosed those banks already involved in the development of the guidelines other than to say it has spoken to international as well as UK banking institutions.

The banking sector has been a vocal supporter of green initiatives and is set to play a key role in the development of low carbon business models through its investment in green projects and provision of credit for firms seeking to cut carbon emissions.

HSBC, Lloyds TSB, Barclays and the Co-op, for example, have all touted their environmental credentials in recent months, while RBS claims it is the largest financier of renewable energy in the world, with over $2bn committed in 2006.