The Co-operative Bank announces ambitious 2030 net zero target

• The Co-operative Bank today announces its commitment to reach net zero on Scope 1 and 2 direct emissions by 2030, and to transition its Scope 3 lending portfolios to align to net zero by 2050 at the very latest.
• The Bank’s ambitious commitments build on its history of environmentalism and market-leading ESG credentials*, but recognises the need for responsibly-led and co-operative societal change to decarbonise without leaving customers and communities behind.

Over the past twelve months, The Co-operative Bank has worked to develop a robust roadmap towards net zero and today has announced its commitment to reach net zero on Scope 1 and 2 direct emissions by 2030, and to transition its Scope 3 lending portfolios to align to net zero by 2050 at the latest**. The Bank’s targeted reductions in financed emissions and scope 1 and 2 emissions will be consistent with a maximum temperature rise of 1.5 ᵒ C above pre-industrial levels and will align with scenarios from credible, well-recognised sources.

Since 1998, The Co-operative Bank has withheld finance from any business or organisation involved in the production or extraction of fossil fuels. This business decision has been guided by the bank’s unique customer-led Ethical Policy, informed by the views of over 370,000 customers since 1992. The Co-operative Bank has also been beyond carbon neutral for over a decade, offsetting all Scope 1 and 2 emissions plus 10% of its historic emissions every year.

As The Co-operative Bank seeks to secure a net zero future, it remains committed to decarbonising in a responsible way that will not put communities at risk. The bank’s Scope 1 and 2 emissions account for <1% of overall emissions. Its value chain, too, is low impact (c.10% of scope 3 emissions). The big ticket item for The Co-operative Bank, as for many of its peers, is mortgage lending, making up just short of 90% of scope 3 emissions.

Mindful of its social obligations, The Co-operative Bank will ensure that its customers are both willing and able to join them on the journey. To put this into action, the bank will continue to finance renewable energy and promote customer home energy efficiency and thereby play its role in facilitating a just transition in the real economy through engagement with customers, and through offering products and services that support decarbonisation.
The Co-operative Bank will approach decarbonisation in a variety of ways:

• To reach net zero on direct emissions by 2030, it will target initiatives such as improving the energy efficiency of its offices and branches and review heating and cooling arrangements to minimise resulting Green House Gas emissions.
• In light of the makeup of its portfolio of emissions, the bank will prioritise influencing consumer behaviour in the UK housing market. The bank plans to expand its product portfolio through the development of a new ‘green mortgage’ product, to accompany its Energy Saving Tool and Green Further Advances product currently on offer to customers.
• To influence its business customers, the Bank will work with Zellar*** to offer businesses a path to sustainability and net zero, as well as offering loans through the Renewable Energy Funding Scheme.

The nature of reducing The Co-operative Bank’s scope 3 emissions means that the support of surrounding industries is critical in order to decarbonise, together in a co-operative way. Whilst The Co-operative Bank has committed to regularly review its targets as it progress along this journey, it recognises that societal and behavioural shifts will be required by all to propel net zero ambitions forward.

Commenting on the announcement, CEO of The Co-operative Bank, Nick Slape said:
“In order to reach Scope 3 net zero, a huge behavioural shift needs to happen in relation to both fossil fuel financing by banks and prioritisation of home energy efficiency by consumers. A true act of co-operation will be required between banks, business, governments and consumers to make the necessary changes. I believe that financial institutions are in a unique position to leverage their lending decisions to support a transition to a low carbon world. We look forward to working with our suppliers, peers and customers – together we can strive to reach net zero for the good of our planet, people and communities”.