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Sustainability in Banks: Emerging Trends

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Sustainable Banking

Abstract

This chapter explores and compares the sustainability and environmental disclosure practices of European banks through a multiple case study approach. Through this exploratory analysis, six banks placed on the Global 100 Sustainability Companies list have been scrutinized to identify similarities and differences among banks’ sustainability practices that may be linked to country-specific factors. The contributions of the chapter are twofold: on the one hand, the study helps to elucidate the most relevant sustainability practices adopted by banks, and on the other hand, the study offers insights and guidance and encourages future research.

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Notes

  1. 1.

    The OECD Guidelines for Multinational Enterprises constitute the most comprehensive international instrument on responsible business conduct (RBC) . The OECD Guidelines set out principles and standards on RBC and steps that enterprises are expected to take to avoid and address involvement with adverse impacts across a range of societal concerns. For further details see OECD (2001, 2017).

  2. 2.

    The Climate Bonds Initiative is an international investor-focused not-for-profit organisation that works to mobilize debt capital markets for climate change solutions. It works with institutional investors, commercial actors and governments to promote investment in projects and assets necessary to support a rapid transition to a low-carbon and climate resilient economy. The Climate Bonds Initiative also runs an International Standards and Certification Scheme for climate bonds; investor groups representing $34 trillion in assets sit on its board and some 50 organizations are involved in its development and governance. For further details see the Climate Bond Initiative website at www.climatebonds.net

  3. 3.

    Equator principles (EPs) are risk management frameworks for determining, assessing and managing environmental and social risk through project financing initiatives. The EPs are primarily intended to provide minimum standards for due diligence required to support responsible risk-related decisions and are conceived to ensure sustainable development in project finance. The social, ethical, and environmental policies of financial institutions that adopt this framework differ significantly from those of banks that do not adopt it (Scholtens and Dam 2007). On the role of EPs as a tool for sustainability in the financial sector, see Weber and Acheta (2014). On the relationship between EPs and bank liquidity, see Chen et al. (2017). On the relationship between the adoption of EPs and shareholder value, see Eisenbach et al. (2014).

  4. 4.

    The sustainable development goals (SDGs) were launched in 2015 by the United Nations. The SDGs follow the Millennium Development Goals and are a universal set of targets and indicators designed to help countries end poverty, protect the planet and ensure prosperity for all as part of a new sustainable development agenda. For further details see http://www.un.org/sustainabledevelopment/sustainable-development-goals/

  5. 5.

    The CDP is the global standard for the measurement and reporting of climate change information. The A List names the world’s businesses leading on environmental performance. For further information see: https://www.cdp.net/

  6. 6.

    The Banking Environment Initiative is convened by the University of Cambridge Institute for Sustainability Leadership (CISL), which also houses the Secretariat. The BEI is a group of international banks convened by the Chief Executives of its members to identify ways to collectively direct capital towards environmentally and socially sustainable economic development. The ‘Soft Commodities’ Compact is a unique client-led initiative that aims to mobilize the banking industry as a whole to contribute to the transformation of soft commodity supply chains and to therefore help clients achieve zero net deforestation by 2020. It represents one of the key work streams of the BEI. Further information can be retrieved from https://www.cisl.cam.ac.uk

  7. 7.

    The Carbon Pricing Leadership Coalition (CPLC) was officially launched in November 2015 on the opening day of COP21, and it brings together governments, businesses and NGOs who agree and advocate that carbon pollution should be priced fairly, effectively and efficiently. For further information see https://www.carbonpricingleadership.org/

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Author information

Authors and Affiliations

  1. DSGSES, University Magna Graecia of Catanzaro, Catanzaro, Italy

    Rosella Carè

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  1. Rosella Carè
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Appendix 5.1: The Global 100 Sustainability Companies

Appendix 5.1: The Global 100 Sustainability Companies

The top 100 Global 100 Sustainability Index is an international standard for evaluating corporate performance on key social and environmental issues. Corporate Knights screens, a Canadian magazine which manages the Global 100, analyzes nearly 5000 companies against their global industry peers to produce an annual list. The ranking is based on publicly disclosed data (e.g., financial filings and sustainability reports) and the precise ranking methodology and results of the process are fully disclosed (Global 100 Sustainability Index, 2017). The review process is described in Fig. 5.1.

Fig. 5.1
figure 1

The Corporate Knight’s review process (Source: Our elaboration from Global 100 Sustainability Index (2017))

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From the starting universe, screening criteria are applied. The screening criteria are described in Fig. 5.2.

Fig. 5.2
figure 2

The Corporate Knight’s screening process (Source: Our elaboration from Global 100 Sustainability Index (2017))

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The shortlist obtained from the screening criteria is then analyzed from the KPIs summarized in Fig. 5.3.

Fig. 5.3
figure 3

The Global 100’s KPIs (Source: Our elaboration from Global 100 Sustainability Index (2017))

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Carè, R. (2018). Sustainability in Banks: Emerging Trends. In: Sustainable Banking. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-319-73389-0_5

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