This is the moment. Banks are feeling pressure from all sides and now understand that unfettered climate change will bring catastrophic environmental impact and dire macroeconomic consequences. Banks must do more than talk about green initiatives; they must now demonstrate they can meet strict standards when it comes to climate risk reporting.
Banks are emerging as a major force in reaching the UN´s Sustainable Development Goals (SDGs).
Consumers, shareholders, employees and regulators are demanding a strong commitment to environmental, social and governance (ESG) priorities and are increasing pressure on banks to show results.
With pressure coming from all sides, banking has reached a green inflection point.
Banks that visualize and execute their sustainability agendas now will have first-mover advantage in the race to meet their sustainability goals.
Sustainable banking is a new contract between the banking industry and society. It consists chiefly of two elements: green banking and sustainable finance.
Green banking refers to a bank changing its internal operations to lower or eliminate its environmental impact through initiatives like green IT and energy-efficient premises.
Sustainable finance is the provision of financial products that incentivize or mandate environmentally-friendly behavior. Sustainable finance tools include green bonds, sustainable mortgages and sustainability-linked loans.
We see five areas where banks can accelerate progress on the objectives of sustainable banking: developing a sustainable banking strategy, managing environmental, social, and governance related risk exposures, offering sustainable products, working towards a smart target operating model for sustainable banking, and embracing green IT.
Becoming more sustainable is a complex and multi-faceted endeavor that may be aided by engaging a sustainable-banking consultant.
Green banks seek environmental sustainability in all aspects of their operations, from operating models to product offerings, workforce policies, IT strategies and beyond. Embracing green banking can often deliver a triple punch of increasing stakeholder value while lowering environmental impact and operating costs.
Green banking products leverage new policies, processes and technologies to offer traditional banking value propositions like liquidity with greater environmental sustainability. They include green bonds, sustainable mortgages and sustainability-linked.
Managing Director – Global Financial Services Sustainability Lead