banking
DECODING ‘GREEN BANKING’
In her two articles published in Woman This Month, Chartered Manager Eman Deabil (DipESG, PfMP, IPMO-P, SIP) spoke about the rise of sustainability and ESG, and how these topics became the talk of the town. She also spoke about the evolving role of the Chief Sustainability Officer (CSO). In this article, she sheds light on green practices in the banking industry.
Green Banking or Sustainable Banking
Sustainability is the need of the hour, there’s no doubt about it. What most individuals do not realise is that sustainability practices can go well beyond one’s home and be implemented at large organisations too.
d by The practices adopte pr to omote banking institutions dly and environmentally frien initiatives. socially responsible ating these This involves integr nventional practices into the co es, such as core banking activiti credit and risk lending, investment, e it greener management, to mak , and hence to or more sustainable -term impact. create a positive long
Here are nine steps which organisations can take to move towards green banking: 1. Promote green investments: Encourage and prioritise investments in sustainable products, renewable energy, sustainable infrastructure, and environmentally friendly projects. This helps drive sustainable development and reduces carbon emissions.
2. Implement responsible lending practices:
Assess the environmental impact of potential borrowers by checking their published ESG/ Sustainability reports and scores granted to them by rating agencies (e.g., Sustainalytics, Refinitiv), provide preferential rates or incentives to the ones have high ESG scores or engaged in sustainable practices.
3. Reduce paper usage: Streamline processes,
re-engineer the processes and promote digital documentation and automated workflows. Organisations are encouraged to opt for electronic statements, digital signatures and online transactions without jeopardising the security of private information.
4. Promote energy efficiency: Implement
energy-saving measures in bank facilities, such as optimising heating and cooling
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systems, using energy-efficient lighting, and encouraging employees to power off electronic devices if not in use.
5. Establish employee eco-consciousness:
focus on sustainability, such as tree-planting, beach clean-ups, educational programmes, care programmes for the elderly and support programmes for orphans.
Promote sustainable practices among employees, such as reducing waste, recycling, optimising existing resources, using energyefficient equipment, offering car-pooling if possible, and allowing them to work-fromhome to reduce their carbon footprint when commuting.
transparent reporting on the bank’s sustainability efforts, maintain independence, and promote diversity and inclusion, ensure data privacy, establish stringent internal controls and encourage whistleblowing on wrongdoings. This helps build trust with stakeholders.
9. Promote better governance: Provide
6. Foster green partnerships: Collaborate
with other banks, financial institutions and organisations that prioritise sustainability practices.
7. Opt for sustainable procurement: Support
sustainable suppliers by acquiring goods and services in a manner that considers environmental and social factors; this might involve evaluating the entire product lifecycle from sourcing to disposal.
8. Engage in corporate social responsibility: Participate in community initiatives that
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