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Europe’s Biggest Banks Warn of Major Flaw in Key ESG Metric

Coal And Wind Energy Sites as PGE SA Invests in Zero-Emissions
Photographer: Piotr Malecki/Bloomberg
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It’s meant to be the ultimate metric for gauging how clean European banks are. But some in the industry say it will be flawed from the get-go.

The European Union’s planned Green Asset Ratio, intended to reveal how much a bank lends to climate-friendly companies and projects, will offer a distorted picture of reality, according to a Bloomberg survey of some 20 major European banks. The firms, which rely on clients for the data they need to calculate the ratio, point out that many small or international companies simply won’t provide it.