EBI Publications

Financial Infos Issue (17) In our globalized world, the dependency of people, companies and governments on financial services offered by banks has become undeniable that leads to the fact that banks are catalysts of change. In recent years, more and more people became aware of the harm that businesses cause to the environment, human rights, and social equity. They started to call for more sustainable economies as well as more sustainable financial systems especially after the financial crisis and the exposure of how “unsustainable banking” endangers the economy. In response, many banks started to make a discernible shift towards addressing the environmental and social impact of their financial services. As more and more banks realize that ignoring social and environmental issues may considerably increase their exposure to credit, compliance and reputational risks especially after the financial crisis exposed to what extent “unsustainable banking” can endanger the economy. What is sustainable banking? Sustainability is about meeting the needs of the present without compromising the ability of future generations to meet their needs. It is about preserving the environment and biodiversity for future generations, and about being cautious with our natural resources and climate. Sustainable banking is essentially about contributing to make this happen. The exact concept of sustainable banking will evolve over time, responding to gained experiences and global developments. A sustainable bank has three main pillars: economic, social and environmental. First, the Economic pillar which implies that customers shall receive what they want fairly, responsibly and transparently while providing good working conditions for staff and deliver profitable growth for shareholders. Sustainable banking requires an understanding of the “triple bottom line” - economic advancement alone is not enough because environmental protection and social stability must also be taken into consideration. Second, the Social pillar defines the bank’s needs to manage the impact of its activities Sustainable Banking