Up against great economic and societal upheaval as a result of Covid-19, banks around the world continue to take sustainability seriously and firmly acknowledge the related risks and opportunities, for the market and wider stakeholders alike. For the second year running, Mazars publishes its responsible banking practices report to assess how banks embed sustainability into their commercial practices.
The financial world can no longer see its future as separate from the environment and climate change developments. In 2020 alone, natural hazards resulted in $210bn of damages and the Bank of England estimates as much as $20trn of assets could be at risk from climate change.
To help banks and their stakeholders with this transition, this year’s study builds on previous Mazars reports published in 2020: “Responsible banking practices, benchmark study” and “How banks are responding to the financial risks of climate change”. This year, following stakeholder feedback and interest, it examines a wider sample of 37 banks based in Africa, the Americas, Asia-Pacific, and Europe. Using these banks’ 2019/20 publicly available reporting, we identify evolving best practices and developing trends in their management of climate change risk and broader social and governance issues.
State of play
Ranking the 37 banks into four categories – outstanding, leaders, supporters and followers – it is encouraging to see that one bank is ranked as outstanding, achieving a positive score in more than 95% of the criteria set in our assessment. It is also remarkable to see more banks rank as leaders and supporters compared to last year’s findings, and fewer (just seven) rank as followers.
However, challenges remain, and our benchmark study reaffirms that strong sustainability practices often come hand-in-hand with consistent industry guidelines and requirements provided by local regulators and governments.
Responsible banking practices - benchmark study 2021.pdf
Virginie Mennesson Head of Regulatory Affairs - FS Consulting - London
With Environmental, Social and Governance factors, and responsible banking practices more broadly becoming an essential focus for the banking industry, Mazars has assessed how banks are embedding sustainability into their commercial practices.
Sustainable finance is expected to be a crucial factor in the post Covid-19 economic recovery period and regulators are encouraging banks to actively embed climate-related risks in their business operations and risk management frameworks. Against this backdrop, Mazars has analysed how 30 of the largest banks worldwide have been responding to climate-related financial risks.
Mazars and the Official Monetary and Financial Institutions Forum (OMFIF) are proud to have come together to produce a global report providing unique insight on current and upcoming financial regulatory evolutions aimed at tackling climate change. What policy adjustments are being undertaken in different jurisdictions around the world to assess and control climate risks? How are these actions likely to develop in future? Find out in our new research and get ready for radical regulatory change.