The report shows evidence of the potential benefits of adopting sustainability as a business strategy. It also shows a dramatic shift in banks' awareness of these benefits. The report argues that banks can tap vast benefits by reassessing their business practices and engaging in sustainability-oriented risk management and product development. The report provides practical examples of 14 financial institutions in 12 countries that have taken concrete steps to integrate social and environmental sustainability into their policies, practices, products, and services.
Key findings from the report include:
- individual banks must devise their own unique business case for sustainable banking
- reputation and branding has become the top reason for many banks to integrate sustainability considerations into their management practices
- compliance with government standards is no longer a top driver for sustainability
- the scope of responsibility for financial institutions in emerging markets is widening – from environmental protection to social inclusion of underprivileged groups and consideration of other social issues, such as labour practices, protection of indigenous populations, and preservation of cultural heritage
- to succeed, banks need to bring their written policies into action through a strategy for creating long-term value through sustainable banking. This entails capacity building and training, as well as setting measurement and evaluation standards
- social and environmental risk management improves the quality of a bank’s portfolio and lowers insurance liabilities and compensation claims
- banks in the survey noted reduced risk (74 percent), improved access to international financing (48 percent), improved brand value and reputation (39 percent), and improved community relations (26 percent) among the most significant benefits.
The report provides case studies of various financial corporations operation in areas such as: Cambodia, Georgia, Ukraine, Romania, Armenia, Russian Federation, Czech Republic, Brazil, Central America, Cameroon, and South Africa.
This summary was prepared by Eldis.