INTELLIGENT BRANDS // Green Technology
Report finds sustainability deprioritised as banks respond to the economic crisis
Hexaware Mobiquity , a Digital Transformation enabler , has published the findings of its report , Global Benchmark for Sustainable Banking 2023 . The research , based on a survey of banking executives conducted by Censuswide , shows that sustainability has fallen down the agenda in the past 12 months . Only 60 % of UK banking leaders say sustainability is an important part of their business strategy , compared to 100 % just 12 months ago . Their attention has been diverted to more immediate problems such as rising interest rates , falling consumer confidence and the need to drive profitability . In fact , more than a third ( 34 %) of banking leaders say prioritising ESG ( Environmental Social Governance ) could impact profitability and would not immediately show financial returns .
In line with these fears , many UK banks have pressed the pause button on sustainabilityrelated activity . The majority ( 60 %) of them are not actively taking steps to foster sustainable behaviours and outcomes . Banks are also less concerned about offsetting their unsustainable practices by investing in carbon credit schemes – less than a third ( 29 %) are currently doing so , down from 50 % in 2022 . Meanwhile the number of banks with an executive at board level overseeing sustainability strategy has decreased from 83 % last year to 54 %. The lack of a cohesive ESG strategy was identified as the most common barrier preventing UK banks from adopting sustainable behaviours , indicating the need for clearer direction and leadership .
“ Last year ’ s report showed that banks had made significant progress in elevating their sustainability strategies , but much of that work is now being undone ,” said Peter-Jan Van De Venn , VP Global Digital Banking , Hexaware Mobiquity . “ The macroeconomic headwinds have forced banks to batten down the hatches and focus on activity that will deliver clear , immediate returns . From board level to front-line teams , banks have been concentrating on keeping their bottom lines healthy , forcing sustainability to take a back seat . While it ’ s understandable that banks are feeling under pressure , there ’ s a risk being laser-focused on the immediate crisis will lead to them missing out on the long-term benefits that sustainability brings .”
Technology holds the key to sustainable growth
All respondents said their bank is pursuing a sustainability strategy , with more than threequarters ( 76 %) using Digital Transformation initiatives to drive sustainable outcomes . However , almost half ( 45 %) don ’ t check the sustainability credentials of suppliers as part of the procurement process – meaning their strategy will only have an isolated impact in practice . Customer sustainability is more of a focus , however , as UK banks called out mitigating climate change risks through assessing their client portfolio as the top strategic imperative in their sustainability agenda ( 37 %).
Banks have a growing awareness of the benefits emerging technologies can play in the sustainability drive , with more than a third ( 35 %) using the power of Machine Learning , Artificial Intelligence , cloud and analytics to make digital services accessible to customers remotely . Looking even further ahead , more than nine-in-10 of them have either invested in the Metaverse ( 38 %) or are planning to do so ( 55 %), as they explore the potential to harness Virtual and Augmented Reality in banking . p
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