2023-06-17 10:08:13
Seven out of 10 Spaniards would like their bank to become more sustainable, while half of the population would be willing to change banks in search of a greater commitment to the environment, society and corporate governance, as pointed out by one survey carried out by the financial services platform Mambu. Incorporating these values has become vital for banks as they attract increasingly demanding customers and investors. It is not surprising that, in this context, there are some banks that try to obtain competitiveness dressing products and practices that are not respectful of the environment or society as if they really are. Something that is increasingly risky.
the bank of Hong Kong HSBC it’s an example. He was forced by supervisory authorities to withdraw an advertising campaign that highlighted “zero emissions” commitments, but failed to mention major investments in projects related to fossil fuels and deforestation. In fact, the world’s 60 largest banks have provided $4.6 billion worth of financing to the fossil fuel sector, according to the Banking on climate chaos report.
On the other hand, in May 2022, German judges ordered the search of several offices of the German banking giant Deutsche Bank, as well as its asset management company, DWS, in Frankfurt. The investigations dealt with an alleged fraud against consumers, who were supposedly offered products as green and sustainable, when they were not.
This malpractice is called greenwashing and international organizations have tried to avoid it on numerous occasions. Despite the fact that science urges us to limit global warming, financing for oil or gas projects is not restricted on many occasions.
Important penalties
This happens in any type of company. In fact, a group of 17 specialists appointed by the UN Secretary General presented a study at COP27 last year in which they draw a series of red lines to prevent greenwashing of non-state entities. One of them is Do not declare yourself “net zero” as long as you continue to build or invest in fossil fuels. “If it is later discovered that the entity is not sustainable, then there is a penalty, which is much greater than the benefit it could have had. The risk is very important reputational damage,” he points out. Elisa Aracil, Professor of Economics at Universidad Pontificia Comillas-ICADE and researcher at the Technological Research Institute of the same university. Other activities that would not be acceptable in this sense could be deforestation, investment in weapons or the commercialization of credits that lack integrity. All these parameters are recorded in the companies’ non-financial information, something that is estimated to gain weight in the coming years.
“There is a growing importance of sustainability not only for customers and investors, but also for our own employees and the communities in which we operate,” he says. marta aisa, Director of Responsible Banking at Santander Spain. The specialist explains that the bank maintains an active dialogue with customers, employees, shareholders and society to know what issues concern them. “Sustainability not only adds, but not being sustainable, far from being neutral, subtracts,” she adds.
But how can users recognize which financial products are sustainable? “The client, except in the investment funds that are more transparent, has an easy way of knowing if he is investing in something green or not,” he stresses. Ricardo Zion, finance professor at EAE Business School. Although he adds that more than 50% of the investments in funds in Europe already meet the sustainability criteria.
Investors should ask themselves, first of all, what sustainability means for them and “how much return are you willing to give up on each investment”, he indicates Aracil. Verifying with the reports of each company if it provides financing to polluting organizations would be a second step, explains Severiano Solana, director of sustainability strategy and monitoring at CaixaBank. There are entities that even measure the carbon footprint of employees, in addition to that of investment products. On the website of each bank, in addition, you can also see all those products that have a green label.
ability to transmit
In the case of Santander, these products can be identified on the entity’s website, where they appear under a sustainability heading. The bank’s Director of Responsible Banking points out that part of this value offer is not only financial but also includes outreach services, information and advice on financing decision-making. “Financial entities are subject to logical scrutiny regarding our sustainability performance,” he says. Ice.
At CaixaBank, carbon emissions, the importance of sustainable mobility in funds and investments and the bonds that contribute to sustainability are taken into account, as well as volunteer programmes, financial isolation problems and other issues of treatment of the Rural and empty Spain. In this line, Solana He maintains that the path of sustainability “has a lot of work behind it and it must be taken very seriously if you want to review all the processes and all the decisions that a bank makes on a day-to-day basis”. In short, the experts consider that the most important qualification is being able to tell what you give to society and that it also reaches people so that, with all the information in hand, they are able to give an opinion.
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