BOSTON, Mass. — More banks and financial institutions are addressing climate change but overall, the sector still has a long way to go, according to a new report.

HSBC led the pack of 40 worldwide banks examined by Ceres in "Corporate Governance and Climate Change: The Banking Sector." HSBC was followed by ABN AMRO, Barclays, HBOS and Deutsche Bank, all of which are European institutions. U.S. banks Citigroup and Bank of America ranked sixth and seventh.

The banks with the lowest scores include Bear Stearns, Lehman Brothers, Bank of China and Bank of Nova Scotia.

Ceres rated the banks based on how the companies dealt with climate change through board of director oversight, management performance, public disclosure, greenhouse gas emissions accounting and strategic planning.

Ceres used a scoring system with a maximum of 100 points. More than half of the banks scored below 50 points, while the top-scoring bank, HSBC, earned only 70 points.

None of the banks had policies in place restricting investments from carbon-intensive opportunities, such as coal plants. Researchers expressed concern that many banks are not pricing carbon into their finance decisions or trying to reduce emissions in their portfolios.

"Over the next 40 years, we're looking at the virtual de-carbonization of industrial economies if the warnings of climate scientists are going to be heeded," said lead author Douglas Cogan, director of Climate Change Research at RiskMetrics Group. "Banks need to start re-ordering their investment and lending priorities now, especially in the energy sector, to reflect changing asset and credit valuations."

The report noted that many of the positive steps undertaken by companies have occurred in the last 12 to 18 months. Twenty-eight banks had calculated their operation-related emissions while 24 set reduction goals.