Sustainability has become a major focus in the financial services industry over the last few years. The COVID-19 pandemic created new opportunities and challenges in addressing sustainability in financial services, prompting institutions worldwide to reassess sustainable finance. As Environmental, Social and Corporate Governance (ESG) in banking becomes mainstream, financial institutions need to take measures to set themselves apart.
By taking ESG into account when making investment decisions, financial institutions can promote socially responsible loans and investments, leading to more sustainable economic activities and projects. Unlike conventional finance, which only considers financial risk and return, sustainable finance considers ESG and the greater impact the financial decision will have.
This is a trend that is quickly catching on—sustainable finance is currently on the rise, with an estimated $20 trillion invested globally, and it is projected to continue growing as more institutions begin to align with ESG principles.
Financial institutions worldwide are evolving to cater to the growing need for ESG by offering more green loans for projects that benefit the community. As Marco DeBenedictis explains, “with ESG financing, you have to be wanting to do something green or sustainable with the proceeds of the loan.”
Examples of this could include:
- Pollution prevention
- Renewable energy investments
- Conservation efforts
- Climate risk insurance
nCino recently hosted a webinar featuring Gemma Lawrence-Pardew of Loan Market Association, Marco DeBenedictic of Barclays and Sohail Jain of nCino, in which they discussed the current state of ESG in banking. The panel also considered the new opportunities the pandemic has created and the challenges related to addressing sustainability in the financial services.
To learn more about ESG financing and sustainability within the financial services industry, download the on-demand webinar now.