of their carbon footprint or how to measure it. Given the broad complexities of carbon accounting, many smaller businesses could have issues getting to grips with the new skills and processes this can require. There’s still a huge responsibility for them to look at their own risk profiles with regards to the broader ESG agenda, but they’ll need help transitioning to become a carbon neutral or more resilient and sustainable enterprise. Banks therefore have an important role to play, working hand-in-hand with their SME clients to help them negotiate these quite complex scenarios. This support could include the use of AI to help curate data, as well as the use of various reporting platforms to assist with disclosure submissions. On the one hand there are all the tools and accelerators needed in terms of change management and engagement. But on the other hand, there’s still a real need to ensure the underlying accuracy of the reporting processes. It’s essential to not forget the basics. Operating the levers of change Sustainability is going to require a massive shift in approach to asset allocations – it is the biggest business opportunity for banks this decade. Identifying the levers that are going to create the behavioural changes within the financial services sector to make this happen is today’s task. Also, banks that have a commitment to sustainability, and create business as usual practices around it, are going to have long-term success. Those that are just starting out on their sustainability journey should turn their aspirations into actions, it’s not too late. From a banking perspective, it’s about what their customers, shareholders and regulators require; they’re all looking for banks to make a tangible difference as far as sustainability is concerned, as opposed to just paying lip service to it. This is a genuine revenue opportunity – one that offers the chance to change the world through responsible banking. The demand for green finance is rapidly growing, as more and more companies and investors look for ways to make a positive impact on the environment. Banks that are able to meet this requirement will be well-positioned to succeed in the years to come. In addition to the financial benefits, green finance can also help banks improve their brand reputation. By being seen as a leader in sustainable finance, banks can attract new customers and investors. It can also open the door to building relationships with governments and other organisations that are working to address climate change. 1 McKinsey Global Institute: What it will cost to get to net-zero 2 Allied Market Research: Sustainable Finance Market by Investment Type (Equity, Fixed Income, Mixed Allocation, Others), by Transaction Type (Green Bond, Social Bond, Mixed-sustainability Bond), by Industry Verticals (Utilities, Transport and Logistics, Chemicals, Food and Beverage, Government, Others): Global Opportunity Analysis and Industry Forecast, 2021-2031 3 https://www.weforum.org/reports/new-nature-economy-report-series/ Adam is IBM Consulting’s Head of Global Sustainable Finance and ESG Leader. On both a personal and professional level, Adam is dedicated to lead and contribute to the necessary changes required, in order to make our planet more sustainable – since 2022 Adam has proudly performed his voluntary role as a European Climate Pact Ambassador. Adam has already worked across 30-plus countries in Europe, Africa, Middle East, India and Asia Pacific, and managed teams of 100FTEs+. Consequently, Adam is even more motivated to address sustainability challenges as he’s seen first-hand the impact climate change is having for populations around the world. Finance Monthly. Investment 73
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