2023-11-07 18:52:37
The commitment to sustainability in German banks has reached a new level. The initial aim was to make clear the importance of credit institutions in the transformation of houses. At the same time, they networked with each other in various initiatives in order to learn from each other. Structures have now been established, boards have defined goals and created responsibilities. Now it’s about using your own expertise to guide business customers into a new decarbonized world.
Philip Krohn
Editor in business, responsible for “People and Business”.
Unlike usual, the financial institutions are not in competition with each other in this task. The banks would have to move forward quickly. “Learning from each other and copying off is not a problem,” said Marcus Chromik, board member of Commerzbank, at the start of the second day of the Sustainable Finance Summit in Frankfurt, organized by the Green and Sustainable Finance Cluster. His industry is poised to transform a high-emitting carbon dioxide (CO2) economy into a low-emitting one. It is relatively low-emissions due to its digital activities, but it can support the change with loans and other financing.
Chromik showed a comparatively positive understanding of the European Union’s regulatory activities. Data is a decisive lever for supporting the real economy into more sustainable business models based on quantitative goals. Due to their own manageable impact on emissions, the banks would only have a direct influence on financing. “If society fails, we will fail too, for example because there is a lack of craftsmen for the renovation,” he said. He saw the approach of forcing companies to document their impact on the environment in detail via the new Corporate Social Responsibility Directive (CSRD) as a building block. “Ruthless transparency may help us,” he said.
Most institutes have now installed sustainability officers and chief sustainability officers who report directly to the board of directors and who enforce mechanisms to ensure that the goals they have set themselves are actually met. However, these could conflict with business objectives of own units, which are more easily achieved if there are no restrictions on emission reduction paths. “That’s why it helps to have a very clear commitment from the board,” said Bettina Storck, who holds this position at Commerzbank.
“Banks think hierarchically. We only have the right to intervene if we have this board commitment,” she said. At the beginning of the sustainability activities, this was missing and she and her colleagues had to work on persuasion. In such an environment, goals would be questioned and reprioritized. But the speed of regulation and the reaction of their customers is forcing banks to become more professional.
“We are really grilled in customer meetings. Questions about details bring beads of sweat to my forehead,” said Storck. Many customers now have their own sustainability units with great know-how. “We need to demonstrate that we are sustainable enough so that customers want to continue doing business with us. We will also lose customers.” Through the CSRD, the number of European companies that submit their own sustainability reports will increase from 11,000 to 50,000, said her counterpart Eva Meyer from BNP Paribas in Germany. “Medium-sized companies have to publish soon. You understand where the customer is and where their journey is going,” she said.
Despite the fundamentally positive control effect, there are still major reservations about the queries, especially among medium-sized companies. “Customers are afraid of questionnaires. The expertise profile of a bank teller needs to change,” she said. Advice is changing and bank employees need different skills when they talk to their customers. Regulation always seems to be a hindrance at first. However, she and her team benefited from having gained experience through a French supply chain law on how to calculate the risks of a business model that limits biodiversity.
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“CSRD is a magnifying glass on issues and forces a company to look very closely at its business model with opportunities and risks,” said Petra Sandner, Chief Sustainable Officer of Helaba, which was the last of the banks mentioned to join the Net Zero Banking Alliance Germany at the beginning of the year has joined. She sees these processes as an opportunity to establish a new dialogue with customers about future business models. But sustainability managers are always a foreign body, emphasized Andreas Gruber from Deutsche Kreditbank. “We cause pain points for colleagues, every bank is trying to streamline processes. We are complicating processes that we should actually be making leaner.”
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