No industry can escape the realities of climate change and banking is no different. With pressure to act coming from all sides – from regulators to end-users – the banking industry has reached a green inflection point.
If BaaS is the hottest acronym in finance in 2022, then ESG is the hottest in the wider world of business. Unfortunately, it’s the hottest both literally and figuratively. ESG – or environmental, social and governance – is dominating corporate discourse this year. As headlines are filled with alarming reports on drought and heatwave records, this focus couldn’t come soon enough.
Since April, large UK-registered companies have been legally required to disclose climate-related financial data. More broadly, meeting ESG criteria is an increasingly important goal for all companies as they seek to win over customers, cut costs and operate more sustainably.
No industry can escape the realities of climate change and banking is no different. With pressure to act coming from all sides – from regulators to end-users – the banking industry has reached a green inflection point.
While traditional banking scrambles to address the significant carbon footprint that comes with a bricks-and-mortar approach, digital banks like Techcap are already at an eco-advantage.
The bank of the future will be a digital lifestyle enabler that has an eco-conscience to retain and grow its customer base as we enter a post-Covid-19 world.
2021 insight from Consultancy.org
In 2020, natural hazards resulted in $210 billion of damages. in the years to come, Climate change could put up to $20 trillion of assets at risk, according to the Bank of England. It’s a stark reality that the banking industry is no longer ignoring.
Research suggests up to 80% of banks are now building sustainability measures into their framework – from training programmes and sustainability policies to green finance products and board-backed targets.
It’s no wonder. Recruitment insight found that 64% of talent won´t take a job with a company that doesn´t have a strong sustainability and environmental policy.
Private and commercial clients now pick and choose banks with strong ESG profiles. Investors, too, are increasingly savvy as to the benefits and importance of sustainability.
In his annual letter to CEOs, BlackRock Chief Executive Larry Fink wrote that environmental sustainability will become a core goal of the investment giant’s decisions.
According to Refinitiv data, investor interest in sustainable assets increased 34% in 2020, 61% when it came to millennial investors.
Because where there are significant environmental wins to be made, there are monetary ones, too. According to the Global Commission on Economy and Climate, the transition to a low-carbon, the sustainable economy could lead to an economic boost of US$26 trillion by 2030. Demand for sustainable finance – corporate lending tied to a sustainability metric – is currently outstripping supply. And multiple studies confirm that companies operating sustainably enjoy stronger value creation, including higher equity returns.
It’s clear that being sustainable is the smart choice on all fronts.
We know sustainable practices deliver major advantages. This is why Techcap was created with a digital vision in mind from the outset: no branches, no paper, virtual offices, virtual cards.
As well as transforming the way our clients manage their money, this means small operational costs and big environmental benefits.
Ultimately, it also makes our model more attractive to an increasingly environmentally-conscious customer base.
What’s most exciting, though, is how our solutions help our customers be more green, too. Friction-less cross-border transactions mean a reduction in carbon miles, card-less and cashless payment options mean a reduction in unnecessary plastic, and advanced data capture technologies tools mean optimised operational efficiencies.
© 2022 - All Rights Reserved
