While the banking sector globally has recognized the importance of government policy for addressing climate change, up to this point most banks have not articulated what they see as needed in the policy environment to achieve this, leaving a disconnect in their transition strategies.
This research highlights how a number of banks are beginning to change this trend by embedding real-economy climate policy advocacy into their transition plans, with differing levels of sophistication. InfluenceMap analyzed the transition plan-related documents of the 15 largest European banks1 to pull out examples of policy advocacy activities and policy dependency disclosures, in order to build out a framework for best practice while also highlighting opportunities for improvement. This briefing is intended to contribute to a conversation about how banks can most effectively engage on climate policy and what additional research, frameworks, and coalitions are needed to support this work.
Best practice makes use of three main tools, each contributing to an overarching process of effective policy advocacy: elevating policy engagement as a key pillar of transition strategy; leveraging sectoral research to identify specific enabling climate policies; and incorporating policy context into client conversations and transition assessments. All of these elements can feed into a strong, informed, and deliberate campaign of policy advocacy by banks.
Elevating policy engagement as a key pillar of transition strategy: best practice sees banks recognizing policy advocacy as a distinct part of transition planning, on par with capital allocation and client engagement. Once this has been established, banks can align public policy teams with sustainability teams and embed advocacy into formal transition planning processes, opening the door for more detailed conversations about what policies are needed and how to advocate for them. It bears noting that many banks already possess robust policy engagement expertise and resources, but that these have traditionally been focused almost exclusively on financial regulation. As a result, banks have yet to prioritize real economy policy engagement on the scale that is required to meet their transition goals.
Leveraging sectoral research: best practice sees banks naming specific government policies needed for priority sectors to transition. Banks with sectoral emissions reduction targets assess their progress toward those targets by identifying the overall decarbonization trajectory informed by emerging technologies, financing needs, and enabling public policies. The most robust reporting also identifies specific policies across a range of sectors so that banks, clients, regulators, and other stakeholders can know what policies to support or what to use as a model in regions that currently lack a policy framework.
Incorporating policy context into client conversations and transition assessments: best practice sees banks conducting transition assessments and client conversations and taking those insights directly to policymakers to advocate for policies that will enable clients’ transitions. Client information points banks toward the most important policies and strengthens their arguments to policymakers.
Using the governance structures, information, and assessments from these three tools, banks can advocate for predictable real-economy climate policy that allows them to reach their transition goals. This advocacy can be both direct and via industry associations. While there are some leaders emerging, there is work to be done across the sector to more firmly embed policy advocacy into transition strategies and governance.
1 Assessed banks: HSBC, BNP Paribas, Crédit Agricole Group, Banco Santander, Barclays, Groupe BPCE, Société Générale, UBS Group, Deutsche Bank, Crédit Mutuel, Lloyds Banking Group, ING Groep, Intesa Sanpaolo, NatWest Group, and Standard Chartered.
Over the past years, there has been a shift in messaging from the financial sector about its role in the net-zero transition. This shift, articulated in a 2024 staff paper from the Institute of International Finance, asserts that the finance-centric theory of change, which suggests that financial sector alignment with net zero goals will lead to the decarbonization of the global economy, needs to be reassessed. It emphasizes that governments should strengthen real-economy policies and sectoral decarbonization pathways, allowing financial actors to serve as enablers of the transition when the right incentives and trajectories are in place.
This briefing seeks to analyze how banks are bridging the gap between the recognition of the need for real-economy climate policy and their own abilities to advocate for such policies. It draws from the transition plan-related documents of Europe’s 15 largest banks,2 highlighting areas of best practice and outlining where banks could go further. It also identifies areas of consensus around policies needed to transition. Transition plan information is hosted in different areas depending on the bank: some have a dedicated transition plan document, others have transition plans incorporated into annual reports, while others still have a mix of documents that contain transition-related information including sustainability and climate reports.
Banks’ transition plans are documents that detail the ways in which they are aligning their governance, operations, and financing activities with organizational and global climate goals. Internally, banks can use the transition planning process to identify levers for supporting the transition and align governance and risk management with climate goals. Externally, transition plans are used by investors, regulators, supervisors, and civil society to understand banks’ plans for supporting the transition and managing climate-related risk.
Many banks have set emissions reduction targets across key financing sectors, in addition to their own operations. Transition plans assess progress toward those targets across the banks’ portfolios and outline key challenges, trends, and opportunities to meet those targets. To reach their transition goals, banks outline strategies including establishing sectoral financing policies, engaging with clients to share expertise and understand barriers to transition, and offering project and capital markets financing linked to sustainability outcomes. Transition plans are increasingly mandated across different regions, and best practice is evolving, as detailed by the UNEP FI in November 2025.
The credibility of a bank’s transition plan depends not only on its targets, but also on whether the bank identifies the public policies needed to deliver them and advocates consistently for those policies. Weak or contradictory advocacy may increase transition, credit, regulatory, and reputational risks, while effective advocacy can support strategic resilience and transition finance opportunities. This briefing aims to highlight an opportunity for banks to more deliberately connect policy dependencies to governance, sector targets, client engagement, and direct lobbying and trade association activity. The following sections discuss instances of good practice as well as areas for growth, intended to contribute to a discussion among banks, investors, civil society groups, and policy experts around what best practice looks like and where more resources and research are needed.
2 According to data from S&P Global on Europe’s largest banks by assets in 2025 the top 15 are HSBC, BNP Paribas, Crédit Agricole Group, Banco Santander, Barclays, Groupe BPCE, Société Générale, UBS Group, Deutsche Bank, Crédit Mutuel, Lloyds Banking Group, ING Groep, Inesa Sanpaolo, NatWest Group, and Standard Chartered.
In line with the messaging shift highlighted above, most of the largest European banks have recognized that their transitions, which rely primarily on supporting clients’ transitions, are dependent on enabling climate policies. A recent report from the Centre for Economic Transition Expertise and the TPI Global Climate Transition Centre characterizes climate policy and regulation as an external factor identified as a dependency in most bank transition plans. Indeed, transition plan documents bear this out. Banks introduce their transition targets and then qualify them by emphasizing that achieving the transition is contingent on ambitious, stable, and credible government policy.3 Where this policy is absent, banks warn that their goals may be jeopardized.
Building on the recognition of the need for real economy climate policies, many banks have signaled a role for themselves in advocating for such policies, with varying degrees of detail and philosophies of engagement. InfluenceMap has tracked policy engagement by banks themselves, as well as their industry associations, on both real economy and financial policy. This advocacy varies from supportive to obstructive positioning across policy types.
Some banks just nod to policy advocacy as a lever of action with a brief explanation about how they engage with governments and regulators to support effective climate policies, share expertise, and articulate the role of banks in the energy transition. Others go into more detail and cement policy engagement as a critical part of their transition strategies alongside financing decisions and supporting clients’ transitions. Once public policy advocacy is firmly embedded into a bank’s transition strategy, decisions around which policies to focus on and what type of engagement to undertake can flow more deliberately.
HSBC has structured its Net Zero Transition Plan around three implementation pillars. In addition to “Supporting our customers” and “Embedding net zero into the way we operate”, HSBC’s third pillar is “Partnering for an enabling environment” where it details engaging with governments, regulators, and industry groups on “necessary frameworks” that support customers’ transition.
While HSBC has established policy advocacy as an integral part of its transition strategy, it provides limited details around what this advocacy actually looks like, what policies it seeks to enable, or how it comes to determine advocacy priorities. The following sections will explore measures to do just that.
Takeaway: The first step is establishing policy engagement as a key tool toward implementing the transition plan. Strategy and planning can then flow from that understanding, with priorities for policy engagement placed alongside other transition plan actions including client assessments and financing decisions.
Once policy advocacy is cemented as a strategic priority for transition, how do banks come to determine what policies to advocate for? Leading banks have begun to disclose their methods for identifying priority policies and how they then seek to support them. These primarily consist of three key elements:
The following sections explore banks’ practice within each of these topics, including case studies from specific banks that provide examples of good practice. The analysis highlights pioneering instances of disclosure and policy advocacy while also outlining where banks could further build out their work.
Most transition documents include a sectoral breakdown of banks’ portfolios and their associated emissions reduction targets, with some detail around sectoral financing policies, decarbonization levers, and obstacles to transition. Decarbonization levers generally focus on how banks will adjust their financing to that sector, or what products or research they will offer to support the sector’s transition. Some banks invoke the need for sectoral climate policy in a broad sense, while others go further and name specific policies that are needed for sectors to transition.
The advantage of naming specific policies and regulations, rather than just referring to them in general terms, is that it enables deliberate advocacy by banks themselves and other stakeholders that read their transition plans. This specificity is useful both for direction (which policies to engage on?) and rationale (this policy is critical for reaching emissions targets!). Below are examples that move from limited mention of sectoral policy to detailed sectoral policy analysis.
Intesa Sanpaolo’s (ISP) sectoral transition plan is organized into three sections. The first assesses each sector’s readiness for transition, providing scientific, economic, and policy context and highlighting key challenges and enablers for decarbonizing the sector. It then reviews ISP’s progress against climate targets in that sector. Finally, it sets out “sector-specific implementation strategies and actions, showing how policies, client engagement, and financing mechanisms drive impact.”
ISP identifies specific policies and regulations in its description of the sectoral policy context and when naming key challenges and enablers for sectoral transitions:
| Sector | Policies Flagged |
|---|---|
| Steel | India's Green Steel Taxonomy and Performance, Achieve and Trade (PAT) scheme EU Carbon Border Adjustment Mechanism (CBAM) US Foreign Pollution Fee Act |
| Agriculture | EU's Common Agricultural Policy (CAP), Effort Sharing Regulation (ESR), and Fit for 55 package |
| Power Generation | EU's Renewable Energy Directive (RED) |
| Residential Real Estate | EU's Energy Performance of Buildings Directive (EPBD) and Renovation Wave Strategy |
Rather than just invoking the need for government incentives or regulation in the broad sense, ISP has pinpointed specific policy mechanisms that enable priority sectors to transition. Nonetheless, ISP could go further and use its robust understanding of the policy landscape to advocate for implementation of the policies flagged, or for the development of policies in other regions modeled after the successful frameworks it has identified. For example, in the power generation sector ISP details engaging with policymakers to transition toward sustainable energy solutions, but does not outline clear advocacy activity around permitting reform for renewables projects or engagement with the revision of the EU Energy Taxation Directive or Italy’s National Integrated Energy and Climate Plan which it had named as key enablers in the first part of the section.
Takeaway: Once banks have identified specific policies needed to transition their target sectors, they can move toward advocating for these policies.
Banks, organizationally, hold a wealth of knowledge around the sectors and regions in which their clients operate. Many of the assessed banks describe client transition readiness assessments to identify climate-related risks and opportunities for transition financing, as well as assess how clients are aligning with the bank’s own transition plan. Best practice sees banks using the information gleaned from client assessments and conversations to develop positions on climate policy and taking those positions to regulators and policymakers.4
4 Banks should have safeguards in place to ensure that client-informed advocacy does not amplify incumbent interests which are at odds with the low-carbon transition. Banks should be able to explain how client policy priorities map against credible transition pathways and methods for treating conflicting client views.
Barclays has clearly drawn the connection between client transition plan assessments and its own public policy advocacy. In its July 2025 Transition Update, Barclays details how it has sought to understand clients’ public policy priorities regarding the transition by conducting a Client Transition Public Policy Advocacy Analysis based on public disclosures of a sample of clients. Barclays goes further to say that “where appropriate, we advocate for policies that support our clients’ transition plans and what they require to transition on commercially sustainable terms. We have developed UK positions on policy actions needed to support the transition informed by client views.”
Further in its Transition Update Barclays outlines clients’ transition public policy priorities by sector (energy, power, food, autos, aviation, cement, mining, steel) and region (US, Europe, UK) and where Barclays has used these findings in engagement with governments. For example, in the real estate sector Barclays writes “within their transition plans, commercial clients regularly emphasise the need for clearer government guidance on retrofit funding and the role of well-resourced local authorities to deliver support.” It then goes on to detail how it made recommendations to the UK government around “how public policy can be used to incentivise SMEs and commercial property owners to invest in energy efficiency improvements to their business premises.”
Barclays identified common decarbonization themes across its Client Transition Public Policy Advocacy Analysis for the industrial sector and detailed playing an “active role in supporting public policy” where clients have identified the need, including “publishing recommendations for how the UK Government could support scaling climate tech, including increasing access to finance and skills. On CCUS, we are looking at where policy could support increased private investment. We have also published recommendations on how policy could support the scale-up of private finance to deliver clean hydrogen.”
Lloyds Banking Group has committed to support the UK’s transition by helping clients transition and working with policymakers to “shape frameworks, accelerate adoption of low-carbon technologies and scale solutions at pace.” It highlights its Client Transition Plan assessment and details its transition plan by system, divided into four key systems (energy transition, greening the built environment, low carbon transport, and sustainable farming and food).
In the low carbon transport sector, Lloyds gives a detailed description of how it “maintained strong external engagement with government and industry stakeholders to influence policy and support the EV transition” including meeting with the Department for Transport and joining the Department for Business and Trade’s Vehicle Industry Policy & Regulation Group to “shape sustainable transport policy.”
In the sustainable farming and food sector, Lloyds writes that one of its priority actions is to use its voice to “articulate the challenges of our clients, through policy engagement with government and industry bodies.” As an example, it described how it “shared our agricultural clients’ experiences with Ministers and officials, and advocated for policy changes to support a resilient sector. We contributed to Defra’s policy work, including the Environmental Improvement Plan, Land Use Framework and the Farming Profitability Review. In 2026, we plan to continue working with Defra on policy delivery and the 25-Year Farming Roadmap.” Lloyds details its key policy asks for the UK Government on agricultural issues in its Farming with nature report.
Takeaway: Banks can use conversations with clients to inform their own public policy advocacy. This helps ensure banks' lobbying efforts are well-directed and strengthens the credibility of the message, while supporting client transition planning.
The above activities should ultimately come together to inform the banks’ own policy positions and advocacy priorities. Policy advocacy can take different forms, including direct conversations and meetings with regulators and policymakers, joint letters taking a public stance on an open policy debate, white papers and thought leadership, responses to government consultations, and messaging in the media or on social media. Banks can conduct this advocacy directly via their public policy or sustainability teams, or indirectly via trade associations.
Drawing from InfluenceMap’s analysis of global financial institutions’ policy engagement, some examples of good practice in direct advocacy range from Goldman Sachs sending an email to a European policymaker to applaud the direction of climate policy action to NatWest Group attending a roundtable with Scottish policymakers to provide expertise on roll-out and financing of energy efficiency retrofits to BNY Mellon submitting responses to government consultations urging support for measures to increase renewables financing. Banks can align their indirect advocacy by monitoring and evaluating the activities of their trade associations, as Truist has done. Best practice would see banks reviewing trade association activity in line with the Global Standard on Responsible Climate Lobbying, which InfluenceMap not yet seen from the sector.
There is an opportunity for banks to be more intentional and proactive around leveraging the policy advocacy apparatus of their industry groups, including financial sector groups, to advocate for enabling climate policies. The European Banking Federation is already doing work in this space, publishing detailed research in conjunction with UNEP FI around policy levers to support the transition of the EU Transportation Sector and Chemical Sector. Working through industry associations allows banks to pool resources and expertise and present a position as a somewhat unified “voice” of the banking industry.
Existing examples of banks referencing industry association engagements include Intesa Sanpaolo working with the Italian Banking Association on incentivizing energy efficiency investments and BPCE contributing to the French Banking Federation’s proposals for the National Low Carbon Strategy. However, this lever could be more generally and more clearly embedded into banks’ transition strategies.
3 Examples of such messaging include HSBC (“government policy remains essential for real-economy decarbonization”), Santander (“The transition will depend on a number of factors beyond our control, including public policy frameworks”), and UBS (“our ability to achieve these targets and clients’ realization of their own decarbonization commitments are influenced by external factors beyond our direct control, such as regulatory developments”).
