Even though awareness of climate change risks has increased, 88% of the world’s leading banks have failed to adequately address climate adaptation risk, according to Climate X.

The Top 50 Banks in the World Tackling Adaptation 2024 report found that many banks continue to fall short in implementing robust climate adaptation strategies.

In particular, only seven of the top 50 banks assessed met more than half of the climate adaptation criteria while none met all the requirements.

Kamil Kluza, COO of Climate X, said: “While a handful of institutions are making strides, the vast majority lack evidence of clear metrics and strategies for supporting communities and businesses affected by climate-related disasters.”

The report also revealed regional disparities, with European banks leading in climate adaptation, while US banks lag behind with many ranking near the bottom of the list.

Standard Chartered from the UK, Banco Santander and Banco Bilbao Vizcaya Argentaria from Spain as well as UniCredit from Italy and Sberbank of Russia were among the top ranked global banks for climate adaptation maturity.

Meanwhile, Japan Post Bank and Morgan Stanley, Goldman Sachs, Capital One and US Bancorp from the US ranked lowest.

Goldman Sachs, Capital One and US Bancorp scored zero across all categories: think indicators, which assess strategic and physical climate risk evaluations, do indicators, focused on the implementation of adaption measures and strategies, and track indicators, covering the monitoring, reporting and transparency of adaptation actions.

Kluza added: “With climate inaction potentially costing up to 20% of cumulative global GDP by 2100, banks will need to take a leadership role in driving adaptation financing to ensure that businesses and economies can withstand the challenges posed by climate change.”