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Banks Told by EU to Take Climate Change Into Account in Lending

A tractor kicks up dust at a farm during drought conditions, in Aisne, France, in April.

A tractor kicks up dust at a farm during drought conditions, in Aisne, France, in April.

Photographer: Laurel Chor/Bloomberg

European authorities have told banks for the first time to take account of environmental risks in lending decisions, ramping up pressure on the financial industry to respond to climate change.

In lending guidelines issued Friday, the European Union’s top banking regulator said banks must incorporate climate considerations in credit policies. Banks should also assess whether borrowers could be liable for contributing to global warming.