Banking’s role in transitioning to a sustainable economic system

banking

The drive for sustainability will force banking’s role to fundamentally change their relationships and relationships with key corporate customers.

They will be able to better understand the businesses of their customers as well as gain insight into their supply chains operations. They will need to be partners, not just financial resources.

If banks don’t have strong relationships with corporate customers, they will not be able to meet their sustainability targets. They will have a difficult time reducing carbon emissions from the companies and projects they finance. They will also have difficulty achieving their net-zero targets. Our research shows that more than half of European banks have ambitious net-zero goals.

Banks cannot encourage companies to reduce carbon emissions and improve sustainability. These banks need to work closely with companies to understand their problems, gain trust, and help them develop solutions. In order to foster greater sustainability in their business ecosystems, they will need to often interact with customers’ supply chain.

Banks will be more trusted by corporate customers if they are a sustainability partner. They will be seen as trusted partners and guides on the path to sustainability.

Effective Sustainability Partnerships

Banks could be effective partners for sustainability in three sectors. Banks can build closer relationships with corporate customers in order to improve their sustainability status. This will allow them to steer their businesses towards greater compliance.


Agriculture
Around 10 percent of Europe’s greenhouse emissions are caused by farmers and other agricultural sector players. Many banks are already working with farmers and agricultural representatives in order to increase their sustainability.

Electric Vehicles
The market for electric vehicles is growing at an amazing rate. There are many ways banks can get involved in promoting sustainability. Last year, the number of electric cars sold increased threefold to 6.6million. This is more than twice the number in 2019. To encourage cleaner transportation, many banks have partnered up with vehicle suppliers, infrastructure providers, and consumers.

Energy
It is vital that we move away from fossil fuels in order to achieve the Sustainable Development Goals as set out by the United Nations and other international agencies. Many banks are supportive of the development and production of renewable energy producers and suppliers.

The 3 Most Important Concerns for Your Customers

We have worked closely with banks to increase their sustainability commitment.

  • Insufficient understanding. Many companies complain about banks’ insufficient knowledge of their businesses. They are cautious about assuming that one-size-fits all solutions to sustainability will work.
  • Trust is lacking
  • Information is scarce. Many businesses believe that there is not enough information on sustainability. However, reliable data is scarce. Industry representatives are the most reliable sources for information on sustainability.
  • Regulation issues. Companies complain often about regulatory requirements that are too complicated, burdensome, or inappropriate.
  • Impact on profitability
  • There are many opportunities. Many companies fail to see the opportunities presented by increasing sustainability demands from regulators, governments, consumers, and other stakeholders.
  • Insufficient incentives. Many companies point out that there are not enough incentives to offset the risk of changing businesses to become more sustainable.

Some banks have begun to explore solutions to these problems. These banks are looking to provide, among others, easier access to financing, better support for marketing, curated information and education portals, and community hubs that link customers with specific industries. These innovations will improve trust and credibility and help banks build stronger relationships with corporate clients. This will allow these institutions to speed up their journey towards sustainability through closer relationships with corporate customers.

If you are interested in discussing the sustainability drive for your company, please contact me here. To learn more about Accenture’s commitment to sustainability, read this report Climate Leadership in the Eleventh Hour.