BNP Paribas uses four financial models to combine economic performance with a positive social and environmental impact: socially responsible investing, which integrates sustainability into management; green finance, which favours ecological bonds; social finance, which channels investment into funds that benefit communities; and social business, which reinvests profits into social projects.group.bnpparibas
Arab African International Bank
In 2003, Arab African International Bank (AAIB) launched its 360 Degree Sustainability programme. Today, the project is a blueprint for the bank’s every action, outlining how it will carry out business operations, run management systems and empower the local community. AAIB weaves sustainable environmental, social and governance practices into every aspect of its operations.www.aaib.com
As part of a company-wide initiative to spearhead the transition to a low-carbon economy, Banco Bci has developed an eco-efficiency plan that outlines objectives to be reached by 2025. These include halving water waste, improving recycling practices and becoming more energy-efficient. The bank has already reduced its carbon emissions by four percent and achieved a 30 percent energy saving.www.bci.cl
The entirely mobile Orange Bank is a financial institution for the modern age. The bank isn’t just digitally savvy, however – it also has a strong sense of social responsibility. To reduce its carbon footprint, Orange Bank has put concrete plans in place to limit its electricity and paper consumption. It has also invested as much as €10m ($11.24m) in climate-aligned bonds.www.orangebank.fr
Online bank mBank knows the impact its actions have on clients, employees, local communities and the environment. As such, it takes its responsibility to the wider world seriously. Its strategy for corporate sustainability and responsibility outlines five core aims: respect clients’ values; be a responsible lender; build an exceptional team; limit the impact on the environment; and improve its management approach.www.mbank.pl
Bank of the Philippine Islands
For the Bank of the Philippine Islands (BPI), business is about more than financial returns. The bank strives to operate sustainably, bringing stability to its customers, and focuses on investments that support a green economy and society. BPI is transparent in its reporting on sustainable practices, and in 2017 announced a 7.1 percent decrease in electricity consumption.www.bpi.com.ph
Access Bank’s values are underpinned by a desire to preserve the future for its stakeholders. As part of its commitment to responsible business practices, the bank ensures its employment standards, suppliers and services hold environmental sustainability at their centre. The bank places particular importance on adding value to the communities in which it operates.www.accessbankplc.com
Jordan Islamic Bank
Jordan Islamic Bank has always operated with the guiding principles of Sharia law at its core. Over the years, the bank has developed to incorporate sustainability into its values. The bank has made efforts to run all of its branches on clean energy, as well as to uphold excellent corporate social responsibility through its investment in the health and education sectors.www.jordanislamicbank.com
Banking on sustainabilityAmid a growing awareness of environmental responsibility, banks must embrace sustainable practices or risk being left behind
In a year where climate change issues have dominated international headlines and global political conversations, it may not be altogether surprising that the question of sustainability has come to the fore in the banking industry as well. Increasingly, banks are being looked to as catalysts of change, and are being asked to wield their power in order to make the world a better – and greener – place.
As sustainability rises up through the financial agenda, banks across the globe are making environmental, social and governance (ESG) issues a priority and are diversifying their offerings to include socially responsible investment products. HSBC, for example, has pledged to commit $100bn to sustainable financing and investments by 2025, while China’s Industrial Bank issued $9.6bn of green bonds in 2018 alone.
With a growing number of financial institutions committing themselves to long-term sustainable development goals, it’s clear that ‘sustainability’ is no longer a mere buzzword in the banking industry, but a key concept that will shape the sector’s trajectory in the years to come. The World Finance Sustainable Banking Awards honour the institutions that have excelled this year, and give a pertinent insight into where this rapidly evolving sector is heading.
A positive change Just a few short years ago, sustainability was something of a fringe issue in the banking industry, adopted primarily by image-savvy firms in an effort to bolster their reputation with customers. However, recent developments have shown that sustainability is now a necessity, not a luxury, for all financial institutions.
In 2016, the signing of the Paris Agreement limited the global average temperature rise for this century to two degrees Celsius above pre-industrial times, accelerating the need to transition to a low-carbon future. In order to have just a 66 percent chance of meeting this goal, approximately $100trn of cumulative investment in low-carbon energy technologies and green infrastructure will be needed in the next two decades.
Financial institutions will play a key role in this transition to a low-carbon economy, with banks around the world already moving away from environmentally damaging ‘sin stocks’ and embracing sustainable green bonds in their stead. The European Investment Bank and the World Bank issued the very first green bond in 2007; since then, the market has grown to encompass more than $160bn in issuances. As banks shift away from unsustainable, high-carbon activities, green financial products are set to gain even more momentum in 2019 and beyond.
Risky climate While many banks are now taking positive steps to enhance their sustainability credentials, those that fail to prioritise ESG issues are in danger of exposing their capital to a number of risks. Investments in fossil fuels could well become stranded assets as climate change continues to rise up the political agenda. Furthermore, banks could risk alienating themselves from environmentally conscious customers and stakeholders through unsustainable practices.
A failure to invest in sustainable products, services and practices could prove detrimental not only to a bank’s credibility going forward, but also to its profitability. The winners of this year’s World Finance Sustainable Banking Awards have shown an exceptional commitment to sustainability at every level of their business, and are helping to drive the industry towards a much greener future.