Financial institutions are the backbone of the global economy, providing capital for innovation, infrastructure, job creation and overall prosperity. But banks also play an integral role in society, affecting not only spending by individual consumers, but also the creation and growth of entire new industries.
As climate change, water scarcity, pressures on natural resources and other sustainability issues take stronger hold, the financial services sector will play a vital role in transitioning to a truly sustainable global economy. With their financial influence, banks can help dramatically reduce global greenhouse gas emissions, curb our reliance on fossil fuels and protect ever-tightening water supplies by integrating environmental and social criteria into their lending, financing and investment decision making. It is particularly important that banks consider the financial risk implications of continued investment in carbon-intensive technologies as well as the opportunities of creating a clean energy economy.
A few financial institutions are beginning to look more carefully at high-carbon projects like coal-fired power plants and mountaintop-removal coal extraction, and are increasing financing for alternative energy projects like wind and solar facilities. Despite the positive momentum, few financial firms have board-level policies in place to manage climate and other sustainability risks and even fewer have specific targets for reducing carbon emissions in their lending portfolios.
We expect the listed banks to face substantial operation pressure in 2016. Net profit is expected to grow by around 2% year on year, assets and liabilities to rise by around 10.5% and 10% respectively, and NPL ratio to increase to about 1.55%.