The ESG Banking Barometer 2026

Four years into benchmarking the ESG disclosures of UK and Irish banks, building societies and fintechs, real progress sits alongside real gaps. Forty firms now hold a net zero target but only 19 have disclosed a plan for reaching it, and no fintech in the cohort has yet published one.

Financed emissions reporting has become close to universal among listed firms, with other ownership types catching up, yet the numbers themselves still vary widely: reported mortgage lending emissions intensity differs by as much as 4.5x between banks. It isn't yet clear how much of that reflects real differences in lending books versus differences in how the figure is calculated, despite all firms claiming to follow standard PCAF methodology. Moreover, these financed emissions disclosures in aggregate overstate GHG emissions from UK residential housing stock by an estimated 34%.

Overall, this year's results reflect a sector under strain. Sustainability teams have spent the first half of 2026 absorbing the urgent demands of SS5/25 on top of Q1 reporting season, with budgets already tight and little room to step back and do the strategic work that would ultimately save time, cost and effort.

I'd put materiality and transition planning back at the centre of that strategic work. Materiality filters and focuses the wider agenda; a transition plan consolidates climate risk, targets, financed emissions and governance into one clear, efficient and credible roadmap. Both cut cost and effort where the piecemeal approach remains expensive and frantic.

If the strategic agenda can rise up the priority list in 2026-7, building on climate regulation foundations firmed up this year, the sector will be well placed to build a genuine leadership role on impact, resilience and sustainable growth.

Emma Walford, CEO and Co-founder, Perigon Partners

Nineteen firms with climate transition plans; no fintechs have one

Transition planning doubled between the 2024 and 2025 Barometers and two more firms disclosed plans this year, taking the 2026 total to 19 firms, almost a third of the cohort.⁽¹⁾ One building society and one specialist or challenger bank published a first plan. Full service banks remain the best covered subsector at 80%, unchanged on last year. No fintech in the cohort has published a plan in any year of the Barometer.

By ownership, listed firms lead, with less than a third of member-owned and privately-owned firms publishing a plan and no PE or VC backed firm yet doing so. That movement between the two groups since 2025 comes from Shawbrook's IPO, not from any firm publishing or withdrawing a plan.

The PRA's Supervisory Statement SS5/25, issued in December 2025, sets an expectation that a firm with a net zero target holds at least an internal plan for meeting it. A similar logic applies to any firm operating in a jurisdiction that has a net zero target, which in the UK means every firm here: if the economy a bank lends into is committed to a transition, the bank needs a view of what that does to its book.

Forty firms disclose a net zero target. Nineteen disclose a transition plan. That leaves 21 firms that have made a public net zero commitment without publishing how they intend to meet it, or making clear reference to an internal transition plan (although these may exist for some).

A transition plan can look like an additional workstream on top of an already full sustainability agenda, but in our experience of supporting firms through it, the opposite happens. A plan is where climate targets, financed emissions work, risk assessment, product design and governance cease being separate initiatives and become one clear, prioritised roadmap. The effort is front-loaded: pulling existing activity together, testing it for gaps, and building the parts that are missing. The output is a significant clarification and consolidation of activity which also greatly increases credibility with board, regulators and other stakeholders.

Eight firms mention UK SRS; twelve are in scope for FY27

UK SRS S2, the climate standard, applies to listed firms for reporting periods beginning on or after 1 January 2027. S2 requires more than TCFD did on scope 3 emissions, on scenario analysis and on quantifying financial impacts from climate change.

Twelve firms in the cohort are in scope for FY27: the 15 listed firms less the three Irish banks, which report under CSRD. Eight firms across the whole cohort referenced preparations for or monitoring of UK SRS, and only four of those eight are listed. Two thirds of the firms facing a 2027 deadline have not yet mentioned it in their reporting. More will comment on readiness in FY26 disclosures.

UK SRS S1, covering general sustainability, is subject to an optional 12 months of transition relief, so first reporting falls to periods beginning 1 January 2028. S1 disclosures must be based on a materiality assessment. Twenty-one firms, 35% of the cohort, are known to have recently or previously conducted a materiality assessment, the same 21 as last year. Three of these materiality assessments were last completed in 2021 or 2022 and are likely to now be out of date. None carries the rigour or the accompanying disclosure UK SRS requires, with the exception of the Irish banks, which already use a double materiality assessment as the basis for their CSRD disclosures.

Of the listed firms in scope for UK SRS, 8 of 12, two thirds, have completed some form of materiality assessment. However, two of these are outdated leaving half of the firms with a 2027 S1 compliance deadline with work to do.

Eight of the 21 assessments were completed or refreshed during the 2025 reporting year, so the firms already doing this work are keeping it current. The relief on S1 has allowed everyone else to defer it. A materiality assessment determines what a firm reports on for years afterwards and is the input to the rest of its S1 disclosure.

UN SDG mapping fell for the first time, to 18 firms

Eighteen firms, 30% of the cohort, map their sustainability plans to the United Nations Sustainable Development Goals. This marks the first decline in this metric from 23 firms last year and the year before, and is below the 19 recorded in the first Barometer.

SDG mapping gained popularity in UK financial services around the flurry of activity relating to the UN Principles for Responsible Banking, launched in 2019, and to COP26 in Glasgow in 2021. Most of what firms produced was high level, matching business activities to goals with delivery seldom linked to the underlying outcomes the SDGs track.

Dropping it is a sign of maturing approaches and of greater care over greenwashing risk.

Coverage held; financed emissions plateaued at 33 firms

Scope 1 and 2 reporting is close to universal. The firms not disclosing are the smallest, by balance sheet, in the cohort. Business travel, scope 3.6, is the next most commonly reported category - one of the scope 3 categories firms have the most direct control over.

Several scope 3 categories fell by one or two firms between the 2025 and 2026 Barometers. Most of that movement is one firm shifting its emissions reporting out of the ARA and into a separate document. From FY27, UK SRS requires those disclosures inside the annual report.

Financed emissions reporting rose sharply between 2024 and 2025 and has now plateaued at 33 firms, 55% of the cohort. All but one of the listed banks discloses financed emissions, and every listed firm will be required to disclose material scope 3 categories from FY27 under UK SRS (the Irish banks already have to do so under CSRD). Across other ownership groups, financed emissions reporting sits between 40% and 44%.

Downstream categories 3.9 to 3.14 remain little reported because they are not material for most financial services firms.

Twenty-seven restatements, and patchy disclosure of what changed

The 2026 Barometer assesses restatement practices for GHG emissions for the first time. Twenty-seven firms, 45% of the cohort, published a prior year comparative that differs from the figure they originally disclosed for that year.

Some of those are minor, reflecting estimates trued up to actuals after year end. However, many are substantive and follow a change of methodology. Disclosure of what was restated and why is patchy. Emissions accounting has not yet matured into a discipline with settled reporting conventions. Establishing GHG accounting and restatement policies has been a focus for many of our clients over the past year, and we expect it to become one across the broader cohort.

Scope 1 and 2 intensity fell faster than the market decarbonised

Operating emissions intensity has fallen across all three categories the Barometer tracks: scope 1, mostly gas, scope 2, electricity on a location basis⁽¹⁾, and scope 3.6, business travel. Each is calculated on a consistent basis, dividing absolute reported emissions by the average full time equivalent headcount in the notes to the accounts, across a matched panel of firms present in both the 2024 and 2026 cohorts.

By comparing those reductions to the emissions factors used to calculate them, we can assess the extent these changes are driven by management action versus background change. The natural gas emissions factor was effectively unchanged over the period, so corporate action is the main driver of the reduction in scope 1 intensity: principally, removing gas central heating from buildings and replacing it with heat pumps. Other energy efficiency measures are apparent in scope 2, where intensity reduced at a greater rate than the UK grid decarbonised, and did so while absorbing some of the scope 1 load that electrifying heat moves into scope 2. A shift towards renewable electricity contracts is also significant in the period, with the proportion of firms reporting market-based emissions⁽²⁾ almost quadrupling between the 2024 and 2026 Barometers, from nine firms (14%) to 32 firms (53%).

Business travel is a different case. Scope 3.6 intensity fell at almost exactly the same rate as the domestic UK flights emissions factor. Air travel is usually the dominant component of a firm's business travel emissions, so on this comparison the reduction tracks the decarbonisation of transport rather than any meaningful change in travel behaviour.

Fifteen firms have emissions assurance, one of them reasonable

Fifteen firms, a quarter of the cohort, obtained at least limited assurance over some part of their GHG emissions disclosures in their latest accounts. One obtained reasonable assurance.

Assurance of GHG emissions is concentrated among listed firms. Ten of the 15 listed firms obtained it, 67%, against 13% of privately-owned and other firms, 11% of member-owned firms and 8% of those backed by private equity or venture capital.

Where firms do obtain assurance it most commonly covers all categories of emissions, with only a handful excluding financed emissions or the whole of scope 3. Excluding scope 3, and 3.15 in particular, leaves out by far the most material and the most complex category to calculate.

UK SRS does not currently mandate assurance for the listed firms it captures from FY27. However, we expect adoption to increase anyway as boards look for comfort over figures, particularly where they underpin public targets. Price appears to be an obstacle currently to greater adoption of assurance among the firms we work with and speak to.

Wide spread in residential mortgage intensity

Across the 17 firms disclosing a residential mortgage emissions intensity in both 2025 and 2026, the lowest reported figure is 11.4 kgCO2e/m2 and the highest 50.8, a 4.5-fold difference. Residential mortgage lending is a relatively homogeneous asset class, and a spread of that size is difficult to attribute to the composition of the books alone.

Emissions intensity is the metric intended to make financed emissions comparable between firms. It does not currently do that. Any attempt at comparing on a like-for-like basis today requires a detailed understanding of how each figure was calculated, which most readers of an annual report will not have, and methodology disclosure detailed enough to support the comparison, which few firms provide.

Every firm reporting financed emissions states that it follows the PCAF standard, which is meant to support comparability by requiring firms to follow a consistent methodology and assign a data quality score to reported emissions figures. Fifteen firms disclose a data quality score for their residential mortgage emissions. Plotted against intensity, those scores give an R2 of 0.05, so data quality accounts for only around 5% of the variation in intensity between firms.

The two lowest intensities in the cohort are calculated on a different basis. Both firms state that their figures are LTV weighted, which reduces the emissions in the numerator by the share of the property value the lender has financed while leaving the whole floor area in the denominator.⁽¹⁾ The PCAF standard does not weight intensity this way, which is why both firms say what they have done. Others may take the same approach without stating it.

Restating those two figures onto the PCAF basis⁽²⁾ narrows the range to 18.4 to 50.8 kgCO2e/m2, a 2.8-fold difference. That is still wide for an asset class of this kind. Is one firm's mortgage book really almost three times as carbon intensive as another's? Unlikely, and the remaining spread is more plausibly a product of calculation choices that are not visible from outside the firm.

Firms' intensity figures overstate UK home emissions by 34%

The level of reported intensities can also be tested against the housing stock the sector lends against. Perigon derives an emissions intensity of 24.6 kgCO2e/m2 for UK residential housing as a whole, from government emissions and floor area statistics.⁽¹⁾ Eleven of the 17 firms sit above it once the two LTV weighted figures are restated.⁽²⁾

Weighting each firm's reported intensity by its share of mortgage balances outstanding, using UK Finance data, gives an implied intensity for 82% of the market of 32.8 kgCO2e/m2.⁽³⁾ Applied to the total floor area of UK residential property, that implies emissions from UK homes of 88.3 MtCO2e, against 66.0 MtCO2e in the government's own statistics.⁽⁴⁾ The reported intensities overstate emissions from UK housing by 34%.

These discrepancies between reported emissions and market benchmarks, and between firms with similar portfolios as described above, demonstrate the significant challenges that still remain in building accurate and comparable estimates of financed emissions. Financed emissions intensity is how stakeholders, investors and the firms themselves gauge exposure to climate transition risk. Making it comparable is both a calculation and a disclosure problem that will not be addressed by the PCAF framework as it stands.

Residential mortgage intensity fell 1%, commercial 8%

Eighteen firms disclosed the physical emissions intensity of their residential mortgage lending in 2026, in kgCO2e per square metre, up from 17 the prior year. Across the matched panel of 17 firms reporting in both years, average intensity fell 1%, from 30.2 to 29.8 kgCO2e/m2.

Commercial property is typically more emissions intensive than residential. Eleven firms disclosed the physical emissions intensity of their commercial mortgage or CRE lending in 2026, the same number as the prior year, and average intensity fell 8%, from 49.1 to 45.2 kgCO2e/m2. The spread between firms is even wider than for residential mortgages. Commercial books carry sector and property type specialisms, where residential property lending is usually more homogeneous.

Firms continue to evolve their financed emissions methodologies, which makes large year-on-year fluctuations and restatements common. The overall averages and spreads hide this. Segmenting the annual change firm by firm shows that five firms reported a more than 10% fall in commercial intensity, two firms a more than 10% fall in residential intensity.

Two firms reported only an economic emissions intensity for their residential mortgages, and one for their commercial mortgages. An economic intensity cannot be compared with a physical one so is excluded from analysis.

Vehicle finance intensity fell 1%; SME lending is not yet comparable

Five firms reported the emissions intensity of their vehicle finance lending in 2026, in gCO2e per kilometre or equivalent, the same number as the prior year. One further firm reported only an economic emissions intensity and is not included here, since it is incomparable with a physical intensity.

Four of the five focus on consumer vehicle finance and are broadly comparable. The fifth focuses on vehicle finance for businesses, which typically involves a greater share of heavy goods vehicles and other higher emitting vehicle types, so it is also excluded from the following analysis.

Average intensity across the remaining four firms fell 1%, from 145.3 to 143.2 gCO2e/km. As with property lending, the spread remains wide. In 2026 vehicle finance intensity ranged from 98 to 187.5 gCO2e/km.

The Barometer also tracks the emissions intensities firms disclose for SME and trading business finance. Too few firms currently disclose these on a comparable basis for inclusion this year.

Net zero targets continue to slowly rise, but ambition level varies

Two thirds of the cohort now discloses a net zero target, a gradual rise from the 60% in 2023.

However, the headline rise is not simply due to new targets being established. Ten firms did establish a net zero ambition between 2023 and 2026. But four quietly removed one, or stopped reiterating a target they had previously disclosed. Four more that held targets were acquired in the period and stopped reporting separately. The remaining movement is small changes in cohort coverage.

The target, for the 40 firms pursuing net zero, comes in different strengths. Just over half have chosen wording that reads as a target or commitment. The rest are more vague, with something that reads as an ambition or even a direction of travel.

Net zero scope coverage has become murkier. Twenty-seven firms state their net zero target covers all relevant scopes, down from 33 last year. Ten firms do not state which scopes are covered, up from three last year.

At the same time, target dates continue to converge on 2050, in line with the UK's own target. Over the last two Barometer years, five firms have pushed their net zero target date back, most of them to 2050, with one moving from 2035 to 2045.

Slipping dates, scope ambiguity, and soft verbs may all look like declining ambition. However, from our experience on the ground it is really more a case of convergence on better-understood good practice. Firms are realising through more detailed modelling how much they depend on external forces to achieve net zero, particularly in areas like financed emissions. As they build these more granular pathways, it is wise to update any previously-set ambitions that now look unrealistic to avoid greenwashing risk. As the market continues to settle on what best practice looks like, and as reporting legislation raises the level of scrutiny and disclosure, we expect that convergence to continue towards clearer but less sexy long-term targets, supported by meaningful interim targets.

Interim target coverage fell from 82% to 70% of net zero target holders

53% of firms disclosed an interim climate target in the latest Barometer, a small drop from 56% the prior year but an increase from 40% two years ago. The year on year movement is small and comes from five firms: three dropped their interim targets, one introduced its first, and one new entrant to the cohort had targets in place.

Among firms that hold a long-term net zero target, interim target coverage has fallen from 82% to 70%: three firms dropped interim targets while keeping their net zero target and three firms disclosed a net zero target for the first time in 2026 with no interim target attached, which is common practice for new adopters.

Most firms with existing interim climate targets maintained them. Six strengthened theirs, including one firm setting a first interim target, and seven reduced their level of interim ambition, including three that removed interim targets altogether. Long-term net zero statements became vaguer this year, and near-term targets did not become meaningfully firmer to compensate.

Establishing any of this requires a line by line comparison of two years of reporting. Firms rarely state that an interim target has been changed or retired; the target simply does not appear in the following year's report.

No firm reports against the full TNFD framework

Nature-related risk is intertwined with climate risk, and voluntary frameworks for measuring and disclosing it exist, most prominently the Taskforce on Nature-related Financial Disclosures (TNFD). Measurement and reporting across UK financial services firms, however, remains nascent. Three firms, 5% of the cohort, mentioned TNFD in their latest annual report, one fewer than the year before, and none has made substantive progress reporting against the full framework.

The data challenges in assessing nature-related impacts are significant. For a bank, any material nature exposure sits inside the lending portfolio rather than in its own operations, adding the challenge of accessing counterparty data to the substantial existing data hurdles.

UK and European legislation now looks to be taking a materiality-based approach to nature-related disclosure, where climate was and is mandated. Even accurately determining whether nature is a material impact, risk or opportunity for a bank may be difficult, so it is unlikely to feature strongly in sectoral disclosures in the near term.

Five firms use the term BVCM correctly

Claims of carbon neutrality and operational net zero have become riskier as the market has reacted to greenwashing risk and global standards have tightened, the SBTi's Corporate Net Zero Standard V2.0 among them. The larger banks have withdrawn or buried such claims over the past few years. However, they remain common across mid-market and smaller firms.

The correct term for investing in carbon credits ahead of a net zero target date is beyond value chain mitigation (BVCM), and it is encouraged as a way of supporting the wider societal transition. It should not be described as offsetting a firm's own annual emissions. Only five firms used the term correctly in their latest disclosures.

Twenty-one firms, 35% of the cohort, state that they purchase carbon credits for offsetting or to support a carbon neutrality claim, a small increase from a fall that was seen last year.

Carbon neutrality may survive as a construct, though probably only where it is tightly defined and validated under the ISO carbon neutrality standard, ISO 14068-1. Operational net zero, however, runs counter to the logic of that standard and of other revised global frameworks. A firm making either claim should check it against latest standards.

ARA consolidation continues, except Ireland

For the first three editions of this Barometer, ESG disclosures got longer every year. Over the last two years they have not. Across a matched panel of 59 banks, total ARA length is effectively unchanged.

The three Irish banks are the exception. AIB, Bank of Ireland and Permanent TSB, responding to CSRD, added an average of 83 pages of ESG content each, driving an average 78 page increase in total ARA length. Excluding those three firms, both total ARA length and the ESG content within it have reduced marginally.

That reduction is driven by consolidation among the listed banks, most notably Barclays' reduction in climate disclosures.

We have read this consolidation as a maturing approach: firms settling on disclosure that is fair, balanced and understandable after several years of adding against new frameworks. We see further opportunities for consolidation, particularly in climate-related financial disclosures, where long explanations are often the symptom of unclear or unintegrated internal processes and governance. This is particularly important to mitigate the risk of significant report expansion from UK SRS, which is likely based on the experience of the Irish banks and CSRD.

Firms backed by private equity or venture capital are the one ownership group adding pages, to the ARA and to ESG content within it, which is what you would expect of fast-growing firms approaching and crossing the scope thresholds for larger company disclosure requirements. However, they should take note of the consolidation trend being led by the large banks and seek to leapfrog the years of unnecessary expansion to more quickly reach a state of clarity and brevity.

Standalone ESG reports are shorter every year

Around a third of the cohort publishes a separate ESG or Impact report, and that proportion has held steady across the three years. The reports themselves have got shorter every year, now averaging 48 pages.

The larger full service firms are cutting their reports while the mid-tier firms are lengthening theirs.

Size is a key determinant of whether a firm publishes a separate report. Median total assets among 2026 publishers is £21.1bn, against £4.5bn for non-publishers, four to five times the size. Around a third of building societies have published a separate report in every year of the Barometer.

Specialist and challenger banks have overtaken full service banks as the most likely publishers, at 46% against 36% last year, while full service banks fell from 50% to 30%. Full service banks are usually first to a reporting practice and the rest of the cohort follows. On that pattern, the number of standalone ESG reports has further to fall.

Separate climate reports rose back to five firms

A separate climate report remains something of a rarity across the cohort, though numbers have crept up in 2026 from a low last year, when two previous publishers, NatWest and OakNorth, did not issue one. NatWest resumed in 2026 with a transition plan update, joined by Leeds Building Society, which published its first standalone climate disclosures. Average length also rose, a movement largely attributable to NatWest.

UK SRS requires IFRS S2 disclosures inside the annual report, where TCFD allowed a cross-reference to a separate document, so the separate report loses its compliance purpose. This year's movements suggest a second purpose is taking its place: a longer-form document for major transition plan updates, which would otherwise dominate the ARA beyond what could be considered balanced.

Timing

Assessment was based on publicly available annual reports and supplementary documents as at our cut-off date, 30 June 2026. For the majority of banks, this meant results for financial years ending late 2025 / early 2026 were included (with the majority reporting against a calendar year ending 31 December 2025). Where results were published late, or banks had a different year end date, the alternative latest available disclosures were used.

Cohort changes

There was only one change to the 2026 Barometer cohort: the addition of one firm. Note that the figures in the chart below, which show how this year's Barometer dataset compares with prior years, do not exactly match the reported figures in previous barometers (57 in 2025, 61 in 2024 and 51 in 2023). This is because historic data was, for some firms particularly relevant for comparative analysis, added to the live database but would have been absent at the point of the prior Barometer being reported.

Financial services firms in 2026 Barometer cohort

60 firms, across 4 sub-sectors and 5 ownership types.

Glossary

Terms used in this Barometer, including the classifications applied to the cohort.

Historic Barometer editions

2026 is the fourth year of publication of Perigon's ESG Banking Barometer. Past editions can be accessed here.

• THIRD EDITION 2025 Financial years ending 2024/5 Read the 2025 Barometer
• SECOND EDITION 2024 Financial years ending 2023/4 Read the 2024 Barometer
• FIRST EDITION 2023 Financial years ending 2022/3 Read the 2023 Barometer