Sibos: Banks readying to execute on sustainability goals

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Meeting banks at Sibos 2022 confirms that the challenge is moving from commitment to execution

This year’s Sibos conference in Amsterdam lifted the lid on how banks are grappling to become more sustainable and advance the fight against climate change. And what it revealed is tremendously encouraging. 

The conference hosted several presentations and discussions about environmental, social and governance (ESG) issues, ethical investing and energy transition. But even more informative were my in-person conversations with executives at banks and other financial services firms. They made it clear that sustainability is becoming critical to their corporate strategies. It’s no longer just an “add-on” that’s tagged on to strategic agendas and business plans. Instead, sustainability is increasingly an “add-in” that banks want to build into the heart of their businesses.  

After many years of concentrating on ESG ratings and carbon footprints, and with regard to the latter making commitments to reach net zero, more and more bank executives now want to start implementing the changes needed for their organizations to reduce their emissions.  

Sustainability challenges and successes 

Almost all the leaders I talked with at Sibos spoke frankly about the challenges and successes they are experiencing as they guide their organizations toward greater sustainability. Difficulties embedding a culture of sustainability across their organizations; struggles sourcing and verifying emissions data associated with lending and investment portfolios; the complexities of aligning legacy information systems and architectures with sustainability goals; and problems integrating net zero objectives across their value chains—these were just some of the concerns raised. Their successes tended to involve the setting of emissions targets and baselines, securing support from stakeholders, and rolling out innovative green products and services. I was pleased to see how many banks are progressing on their journeys to sustainability. Lots of small banks, for example, are starting to get to grips with the work required to become net zero. But it’s clear that nearly all banks still have a long way to go. 

The willingness of delegates at the conference to share the insights and learnings they have gleaned on their sustainability journeys was particularly encouraging. It’s difficult to imagine that such openness and co-operation could occur during virtual conferences or via digital communications. After a two-year hiatus due to the Covid-19 pandemic, during which the annual Sibos conferences were solely digital events, delegates seemed to relish engaging once more in face-to-face discussions and conversations.  

Any concerns that an international conference such as Sibos, which attracts visitors from around the world, might itself be detrimental to the environment are likely to be outweighed by the positive sustainability initiatives set to emerge from the event. 

Net zero banking research 

During the conference I presented some of the findings of our recent research into how banks are responding to demands from multiple stakeholders that they reduce their carbon emissions to net zero. Drawing on the research, I identified some of the key conundrums or obstacles that are hampering banks on their journeys to net zero. It’s clear from my discussions with a variety of banking executives at the conference that these conundrums are a big challenge for many institutions. I’ll discuss the research and our forthcoming report, Banking for Net Zero: Taking a lead role in executing on sustainability commitments, in my next blog post. I’ll also highlight some of the ways banks can overcome these conundrums.  

Key takeaways from Sibos 

For now, here are my key takeaways from Sibos: 

  • Sustainability is moving up banks’ strategic agendas. Banks are starting to recognize that sustainability is no longer simply an “add-on” onto their current business model but is instead an “add-in” that requires an extensive transformation of their organization to ensure their future wellbeing and success.   
  • Many banks have advanced significantly along the path to sustainability but most still have a long way to go. 
  • Bank executives recognize that many of the challenges posed by the shift to sustainability are common problems and opportunities. They are therefore willing to share their experiences and are eager to learn from other organizations. 
  • Banks are reaching out to a growing number of diverse potential ecosystem partners, such as utilities and information providers, that can help them and their customers become more sustainable.   
  • Sustainability will be an even bigger topic of discussion at next year’s Sibos conference in Toronto.  

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