It published the report “responsible banking practices 2021”, which evaluated the banking sector. According to the report, banks offering responsible products averaged 47 percent last year, compared with 82 percent this year.

He published his Global Report “responsible banking practices 2021”, in which he evaluated the sustainability practices of 37 banks in Europe, Africa, the Americas, Asia-Pacific.

According to the report, where the banking sector’s opportunities and risks for sustainability are widely discussed, fully implementing the practices needed to achieve sustainability goals remains an area to work on.

BANKS MAKE SIGNIFICANT PROGRESS IN SUSTAINABILITY

“It is clear that banks are increasingly committed to making their practices even more sustainable. Progress has been made in this area since our first research. Our findings are promising, but they also reveal work that needs to be done. Banks need to fully implement the necessary practices, especially in terms of climate risk management and disclosure, in order to achieve their sustainability goals. One way to achieve this is to improve the methods used and better specify quantitative data of climate-based impacts in reports. Positive developments in this area will allow banks to fully play their role in shaping a more sustainable future for the global economy,” he said.

FINDINGS FOUND IN EVALUATED BANKS

Leila Kamdem-Fotso, who also provided details of the findings of the banks evaluated in the global review, said: “developing a culture of sustainability and giving responsibility to those who hold senior positions for it. On average, 74 percent of banks took measures to develop a culture of sustainability and adjusted their administrative structure accordingly. That figure was 49 percent last year. But the integration of environmental, community and management capabilities in the election of the board of directors and the measurement of environmental, community and management performance in determining reward are still not common practices. Adhering to SMART goals in terms of sustainability, especially climate-related goals. The methods of strategic alignment to the Paris Agreement were of interest. 51 percent of banks are trying the PACTA method to bring their finance portfolios in line with the goals of the Paris Agreement. But this has not yet been reflected in the banks ‘ official commitments to climate neutrality,” he said.

Leila kamde I-Fotso, went on to say:

“More advanced risk management practices have been adopted in relation to environmental risks compared to broader environmental, community and management risks. Most of these involve the ability to study climate scenarios. But it is still difficult to measure the financial impact of climate change on banks, as there is a lack of quantitative information on this issue. Only 22 percent of banks provide quantitative data on material climate risks. The most common method is to implement sustainable Reporting Standards, most of which focus on climate goals, together with CDF and TCFD recommendations. Greenhouse gas emissions are the most reported element when it comes to metrics and targets. Greenhouse gas emissions on the 3rd scale pose a serious reporting challenge. Only 11 percent of banks disclose issues related to their financial activities. They offer more mature corporate offerings than individual offerings, and climate and environmental products are more commonly seen than economic or social products. Yesil Yesil, for example, 78 per cent of banks have green bond offers, but only 32 per cent have green products aimed at individuals. Comparing the banks ‘ proposals is still difficult as there are no standard report frameworks.”

FRENCH AND BRITISH BANKS MAKE PROGRESS

“The average of banks developing a responsible product is now 82 percent, ” said Leila Kamdem-Fotso, who noted that compared to the 2020 assessment of these results, banks have made progress in all areas of sustainable finance studied. Last year, that figure was 47 percent. Just over half of banks have developed a culture of sustainability and updated their administrative structure accordingly. The number of banks complying with environmental, community and Management Reporting Standards also increased by 45 per cent. There are clear delays in areas such as incorporating environmental, community management and climate criteria into risk management frameworks and implementing sustainability strategies. French and British banks are leading the way in culture, management, strategy and bidding,” he said.

Leila Kamdem-Fotso, who stated that French and British banks lead the way in their product offerings with culture, management, strategy and responsibility, continued her words:

“The banks of both countries have high scores for adapting their statements to environmental, community and Management Reporting Standards and for including Cty risks in risk management frameworks. They need to improve themselves on the use of climate scenario reviews for risk management purposes and in explanations. The Bank of England, the Banque de France and the European Central Bank began to focus more on these areas.”

“THEY PERFORM WELL IN RESPONSIBLE PRODUCT OFFERING”

North American banks have performed well in areas such as management, strategy, environmental community and management disclosures and responsible product offering, Leila Kamdem-Fotso said. “North American banks have also been successful in integrating environmental community and management disclosures and have surpassed French and British banks on average. French and British banks need to work harder to incorporate environmental community and management risks into their risk management frameworks,” he said.

SOUTH AMERICAN BANKS AT THE FOREFRONT OF MANAGEMENT AND SUSTAINABILITY

South American banks have performed well in management and sustainability, said Leila Kamdem-Fotso, but they need to work harder to incorporate environmental community and management risks, including climate risks, into risk management frameworks and deliver responsible products.

ASIA-PACIFIC BANKS SUCCEED IN PRODUCT OFFERING

“Two-thirds of these banks offer sustainable services and products across all lines of business, ” said Leila Kamdem-Fotso, who said that Asia-Pacific banks have done a good job of providing particularly responsible products. The region’s overall score needs to move forward on strategy, risk management and disclosure. In Hong Kong, New Zealand and Australia, progress is expected to be made in the area of climate resilience and efficient disclosure with new legislation. As a result, it is aimed to develop a more systemic approach to sustainability,” he said.