Sustainability is one of the key forces driving change across the industry right now. From investment decisions to how workforces operate, sustainability is a topic that is being discussed across all levels of the organization within financial services. As part of this shift to embrace sustainability, or at least move in the right direction, what role does trust play? Creating meaningful change requires a basic level of trust, but how can this be embraced to truly harness sustainability effectively?
Starting from the top
Strategic priorities often shift and evolve and are of course typically aligned with the individual financial institution. With the rise of sustainability as a global topic this is changing, and we are seeing organizations now looking to address a common objective of becoming more environmentally friendly across the board.
With this united goal a new focus is required and a fresh approach. CEOs and leadership teams need to tackle the topic from the ‘inside out,’ and delivering tangible results will require a culture of sustainability to be engrained in every part of the organization. This will often mean evolving the dynamics of how people work and even acquiring new leadership skill sets, to create a platform for trust and visible action. With the potential to unlock $12 trillion worth of savings and revenue annually, plus the creation of an additional 380 million more jobs
1, the potential positive impacts are huge.
Maturing operations in this way can also bring about greater security for organizations. Geopolitical instability, global changes and macro-economic challenges are all creating uncertainty. Therefore, the more efficient, pro-active and co-ordinated an organization can be, the more resilient it is likely to be. This not only helps foster long-term profitability and success, but can also support short-term goals; for example, taking action to reduce energy consumption during the current energy crisis to help manage the associated costs.
One team, one goal
Change is far easier and more effective when everyone is included in the journey. Engaging employees in the sustainability roadmap is the only way to truly evolve and harmonize sustainable operations. This may require investment in educating and upskilling staff, but the results are clear. Going green has been shown to not only help retain employees, but also attract new ones.
Setting out clear goals that guide how the organization runs and empowering all teams to contribute to achieving key milestones greatly increases the chances of delivering excellent results. As part of its transition to a greener future, BBVA implemented a reskilling program that allowed employees to undertake sustainability training tailored to their role
2. With some employees also able to achieve international accreditation through the program, this is a great example of embedding a commitment to sustainability success at every level.
Creating and driving such behavior shifts will certainly make a tangible difference to achieving key green milestones, and this again leads back to the topic of trust. Becoming a more environmentally friendly and inclusive organization requires the involvement of all, built on a foundation of trust, loyalty and the willingness to make a change.
Collaboration across the value chain
If an organization wide commitment to environment, social and governance is going to be truly effective, then it of course needs to include the wider supplier and stakeholder ecosystem. This is a much bigger undertaking and will require time and commitment on both sides. Back to trust and the need for open and visible relationships across the value chain.
IKEA is a well-known advocate of driving sustainability at every stage of its operations and supply chain. From promoting Better Cotton initiatives, to publishing a map on the origin of its wood supply, this is a good example of a holistic approach to becoming a greener and more responsible organization.
Outside of the supplier landscape, there is also an opportunity for financial institutions to work closely with businesses at the other end of the value chain. When approving products such as loans, financial providers have the power to encourage companies to act responsibly and support those who are treading the path towards sustainability.
Where banks make investments can also be a hot topic across the value chain. Dutch based Triodos are a good example of eco-friendly investing, with a commitment to only financing projects that support people or our planet
3; demonstrating how protecting our future needs to be embedded into the ethos of all operations.
Creating win-win opportunities for consumers
Sustainability is of course not just gaining momentum amongst businesses, but also for consumers as they become more and more conscious of the impact of their everyday actions. Consumers are looking to industries to help drive positive change and trusting leadership teams to act sustainably.
Aligning with consumer mindsets in this way creates opportunities for organizations to derive competitive positioning from prioritizing environmental, social and governance. Operating as a trusted partner, financial institutions can educate and support consumers with go greener actions in their everyday lives, as well as with ways to bank more sustainability. For example, offering customers advice and education on digital skills and digital literacy, using technology and digital as vehicles to drive such change.
Offering such wrap-around, ‘value-added’ services in support of a more sustainable future will surely enable organizations to leap ahead with their brand image. In a highly competitive environment and with empowered consumers, building bridges of trust, value and emotional connection can go a long way in securing brand affinity and loyalty – with consumers wanting to use and be associated with responsible banking.
Creating a core purpose to support a more sustainable future is essential, and this needs to be underpinned by the power of trust. From risk management and employee advocacy to stakeholder engagement and consumer satisfaction, internalizing sustainability goals and fostering an unwavering commitment is the only way to create change for good. It’s the right thing to do, not only for the future of banking, but also for society as a whole.
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Sustainable Banking, and
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First appeared in
Global Banking and Finance Review.
[1] https://www.unepfi.org/industries/banking/130-banks-holding-usd-47-trillion-in-assets-commit-to-climate-action-and-sustainability/
[2] https://www.bbva.com/en/sustainability/bbva-has-already-trained-close-to-75000-employees-in-sustainability/
[3] https://www.zerosmart.co.uk/post/most-sustainable-banks-in-the-uk
