Banks working to develop global standards on accounting for carbon emissions in bond or stock sale underwriting have voted to exclude most of these emissions from their own carbon footprint, three people familiar with the matter have said. 

A majority of banks comprising an industry working group have backed a plan earlier this month to exclude two-thirds of the emissions linked to their capital markets businesses from being attributed to them in carbon accounting, the sources have said, following months of discord over the issue. 

If upheld, the decision would pit banks against environmental advocates, many of whom say the banking industry should assume full responsibility for the emissions generated by activities financed through bonds and stock sales, as it already does with loans. 

Almost half of the financing provided by the six biggest US banks for top fossil fuel companies came from capital markets rather than direct lending between 2016 and 2022, according to environmental group Sierra Club. 

Banks with big capital markets operations in the working group have argued that they should assume responsibility for only 33 per cent of the emissions of activities financed through bonds and stock sales because they do not have control over the borrowers as they do with loans. The banks have also expressed concern about capital market-related emissions dwarfing their lending-related emissions, the sources have added.