With sustainability on everyone’s mind, investors want to find solutions that benefit people, planet, and profits. We ask financial experts, top banks and mutual funds to get down to the green bottom line, and find out what it takes to feasibly decrease our carbon footprint
There’s a slim chance that the cash in your bank account is a direct cause of greenhouse emissions. Slim, but not zero. However, it’s the investments you explicitly make with financial institutions that have a bigger impact, positive or negative, on the environment.
Ever since 2015’s Paris Agreement on climate change, almost every global bank has made a commitment—fiscally or otherwise—to reducing its carbon footprint. For instance, Goldman Sachs announced that they would spend US$750 billion on green initiatives and funds over the next decade, and Citigroup has committed US$1 trillion to sustainable finance from now until 2030. However, investors can still nudge financial institutions in the right direction by choosing how and where to invest their sums.
We speak to financial experts and heads of the financial institutions in the world to uncover what makes our investments green.
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Leading The Climate Conversation
According to climate non-profit organisation CDP, “almost all climate-related impacts and risks of global financial institutions come from financing the wider economy,” which includes the emissions generated by banks from heating their buildings to flying executives to meetings. However, the rise of ESG investments gives new impetus for financial institutions to prioritize net-zero goals. Still, it's up to investors to choose a greener future by “voting with their wallets”, says Hari Ram Kumar RS, global head of risk intelligence at Supply Wisdom.
Rosalind Ng, global head of client experience and strategic business enablement at Standard Chartered Bank, states that “banks have to leverage the financial system to minimise the impact of global warming.” She adds that “focusing on any one specific area is not enough.” To do so, banks need to implement green measures in all facets of their operations.
Standard Chartered Bank’s various new partnerships encourage clients to sign up for green solutions. It has enrolled in a scheme with its manufacturing partner, Thales, to produce carbon-neutral credit and debit cards since November 2021. The carbon offset initiative saves 450 tonnes of CO2eq (carbon dioxide equivalent) per
year, equivalent to 15 million plastic bags.