The 3rd bullet point is conspiracy theory. Also, difficult to parse. I'll give it a try: banks are lobbying to prevent something. That something is the broadening of the credit issuance mechanism. The way the broadening is supposed to work is by excluding projects that move costs onto third party balance sheets. How can you broaden something by excluding a category of projects? That's quite a headscratcher.

I think I see another way to parse your statement. Banks lobby to prevent X in order to exclude Y. Where X is the broadening and Y is some projects. But I don't understand your point. If the bank lobbying on this matter is bad, it follows that you are in favor of including Y, vs excluding Y. So you want to include projects that move costs onto third party balance sheets? What does that even mean? What projects do you have in mind, and how would these projects help with climate change?

Anyway, back to your central point, which I believe is this:

  > no credit = no project

And this:

  > projects are evaluated on narrow financial criteria

You would like banks to evaluate ESG loans in such a way as to account for the net benefit to society. That sounds like a sensible idea. It results in yes credit = yes project.

The problem is that the loan continues to exist after its origination too. And at that point the financial criteria revert to being narrow. Let's say JP Morgan announces during the quarterly earnings call that they increased the loan loss reserve by $20 billion because of non-performing ESG loans. And Jamie Dimon hops on the call and explains to the analysts that those loans were made with the full consideration of the societal benefit they entail. Do you think people will say, "Ah, ok, then we're all set. Good job Jamie, keep it up". Well, there's actually quite a good chance that this is exactly what they'll say, but millions people will vote with their wallet, and the share price of JPM will tank.

I see how you can perceive this as being short-sighted, or unfair, or [insert some bad sentiment]. But this is how the world works.

And guess what. At least the US Government is aware of how the world works, and the Inflation Reduction Act decided to work within the system rather than fight it. So banks are very happy to extend credit, and green projects are booming. See for example [1]. All in all, a lot of people see the glass half full.

[1] https://www.gsam.com/content/gsam/uk/en/institutions/market-...