This report analyses the challenges and opportunities of the climate crisis in accelerating sustainable finance, based on insights from banking professionals. The key findings are that banks face increasing economic and political pressure, with greater risk awareness. The gap in ambition towards net-zero emissions is a concern, alongside uncritical cultural traits, internal barriers, and enablers, and the need for stronger collaboration among banks, governments, communities and private sectors. The report provides recommendations for banks, such as supporting internal transformation, addressing cultural traits, and creating buy-in throughout organisations.

The report examines sustainable finance in the banking sector by providing recommendations for accelerating the low-carbon transition at banks. Findings are based on insights from people working inside banks, as a collaboratively joint initiative. The economic and political context for banks acting on climate has become more complex, requiring internal leadership, change management, and internal capacity building to complement voluntary actions.

Ambition gap

The report shows that there is a significant gap in ambition towards net-zero emissions, alongside the need for avoiding political and reputational risks, as well as robust climate assessments. Insiders have suggested greater transparency and cultural change, in addition to greater investment in clean energy.

Culture

The report highlights the challenges of internal cultural traits in fostering sustainable finance, including strict rules, hierarchy, and focus on process efficiency. The report recommends creating a culture of continuous improvement on climate action, true business transformation, and risk assessment, emphasising the need for personal stories to support positive cultural changes.

People

The authors suggest there is a lack of clarity and internal resources, high expectations, and difficulty in influencing departments without a common organisational structure for environmental, social and governance (ESG)-related work. There is a need for dedicated ESG teams and change management tools for people management, with investment in climate training.

Overall, banks have a significant role in fostering sustainability and providing capital to low-carbon solutions, requiring challenge, cultural change and supportiveness to ensure the transition to a low-carbon economy. The report provides recommendations based on the challenges and opportunities encountered by banking professionals, and suggestions for banks, such as internal transformation, addressing cultural traits, creating buy-in throughout organisations, stronger collaboration, climate assessments, and investment in clean energy.