Citigroup and Bank of America have joined Morgan Stanley on the list of global banks pledging to measure and disclose the impact of their lending decisions on climate change.

As members of the Carbon Financial Accounting Partnership, banks will also collaborate to set industry-wide standards for measuring climate risk associated with lending activities. The PCAF, which has nearly 70 members who hold more than $ 9 trillion in assets worldwide, aims to push the financial industry to meet the goals of the Paris climate agreement.

“By joining the CFP, we are helping to put in place a coherent framework for institutions to measure funded emissions, while providing a useful tool in the management of these emissions, which is an essential element in the fight against climate change. “Anne Finucane, vice president at Bank of America, said in a press release.

The two announcements, released separately on Wednesday, would make Bank of America and Citigroup the second and third major U.S. financial institutions to join the group, and Citi chief sustainability officer Valerie Smith said she believed that other big banks would soon follow suit.

Earlier this month, Morgan Stanley became the first major U.S. bank to join the partnership. The Amalgamated Bank of New York, with $ 5.7 billion in assets, joined PCAF in 2018.

“I expect other institutions to join us in the short term, as it really has to be a collaborative effort,” Smith said in an interview on Wednesday.

Citigroup also pledged to fund $ 250 billion in low-carbon projects as part of a new five-year sustainability pledge announced on Wednesday. The company said it wanted to develop new “innovative financing structures” to fund activities in areas such as renewable energy, water conservation and sustainable agriculture, which will help accelerate a wider transition. towards a low carbon economy.

“If there is one lesson to be learned from the COVID-19 pandemic, it is that our economic and physical health and resilience, our environment and our social stability are inextricably linked,” said Michael Corbat, CEO of Citi . Environmental, social and governance issues have “been central to Citi’s response to this health crisis, and increasingly present in conversations with customers and partners.”

A number of banks have carved out niches in lending to renewable energy forms or integrated clean energy into their own operations, but few in North America have gone so far as to examine their lending practices to see how. they could contribute to climate change.

Stress testing for climate risk and disclosure of the carbon footprint of lending activities is even more common in Europe, where regulators recently asked the banks they oversee to consider environmental risks in their loan decisions.

The major North American banks still have resisted calls from investors to disclose the impact of their lending activities, however. The four largest US-based banks, JPMorgan Chase, Wells Fargo, Citi and Bank of America, are also the world’s largest financiers in fossil fuel exploration, according to an analysis by the Rainforest Action Network.

In its announcement on Wednesday, Citi said it would test its portfolios for transition risks and physical risks associated with climate change under 1.5 and 2 degree Celsius warming scenarios. These thresholds are remarkable because scientists largely agree that climate-related threats to human and natural systems will significantly increase with an increase of 1.5 degrees in global average temperatures. Citi will assess its own portfolios conforms to recommendations by the Task Force on Climate-related Financial Disclosures.

Citigroup has also set new internal targets for energy efficiency and waste reduction in its own operations. The company said it intends to meet its goal of sourcing 100% renewable electricity from its global footprint before the end of the year. He also said that since 2005 he has reduced his energy consumption by the equivalent of about half a million cars on the road for a year.