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CP: a successful strategy towards sustainable banking

Learn about the tools and trends shaping sustainable banking strategies in the 21st century, bridging the financial and environmental worlds. Explore eco-efficiency, eco-dividends, cleaner production, and financial impacts of sustainable practices.

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CP: a successful strategy towards sustainable banking

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  1. CP: a successful strategy towards sustainable banking

  2. Economy is a sub-system of ecology

  3. Towards a Sustainable Economy Growth Eco-efficiency Sustainability Yesterday Today Tomorrow Flora & fauna Mining Oil&Gas Industry Trade-Serv Agriculture $ clean polluting

  4. The tools for the sustainable banker of the 21st century Economic: IRR, NPV, Ratio-Analysis, balance sheets, cash flows, guarantees, etc…. Environmental:Cleaner Production, Environmental Management Systems, Environmental Management Accounting, Eco-labelling, environmental risks analysis and classification, Life-Cycle Analysis, eco-balance, environmental reporting,etc…. Commercial information, public image, etc

  5. A two-way bridge between two worlds Financial world Environmental world CP Common language Eco-risks Eco-dividends businesses

  6. Current trends in commercial banking • Financial institutions are becoming • increasingly similar • Commercial banks’ activities are • expanding in developing countries • and countries with economies in • transition • Increasing interest in sustainable • banking

  7. Types of financial institutions (FIs) • commercial banks • savings and loan associations • life insurance firms • state and local government pension • funds • sales and consumer finance companies • mutual funds • insurance companies; credit unions

  8. Financial institutions - increasing similarity • Traditionally, different types of FI • specialised narrowly in their own • areas • Still true to some extent, but less so • Many FI’s are expanding their • product-ranges into others’ areas

  9. Sustainable banking - (1) • banks and other FI’s are becoming • more aware of their environmental • responsibilities - both in banks’ own • operations, and in lending • 1992 Earth Summit: “UNEP • Financial Initiative on the • Environment and Sustainable • Development”

  10. UNEP Finance Initiatives (UNEP FI) • Conceived at the 1992 Rio Earth Summit, UNEP FI has grown from from 6 banks to some 270 financial institutions by 2001. • The UNEP FI is a voluntary pact between UNEP and some 270 financial institutions globally • UNEP FI promotes sustainability excellence across the finance sector • UNEP FI builds the business case for Financial Institutions and Insurers to become sustainability leaders

  11. Sustainable banking - (2) Some banks are moving from a traditional defensiveposition: - non-active - deny banks’ responsibilities for environmental impacts - resist environmental legislation towards …..

  12. Sustainable Banking - (3) …. Sustainable banking : - Proactively seek environmental cost savings - Recognize possible environmental effects on project’s and firm’s risks - Set up special environmental funds

  13. CP opportunities for client Opportunities for the clients and FI Business’ derived environmental liabilities and risks IMPACT ON FI é Capital Costs é efficiency Operating é é Financial costs ê costs ê Market share é ê Repayment u Asset value New market Reduced New business u opportunities assets value Legal liability Inherent preventive approach u Fines Potential legal u Clean up liability Long term pollution liabilities ê Damaged Better é ê REPUTATION reputation reputation

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