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The ESG Review: Are banks racing for ESG supremacy?

In a week that has seen several major stories about how the banking sector is aiming to respond to ESG pressures this year, one stood out: a survey into which now have the best credentials.

The piece in City AM highlighted BNP Paribas as the overall league leader in a credentials classification by East and Partners, underpinned by a survey. The exercise was in partnership with communications consultancy Impact & Influence.

Standard Chartered, Citi, HSBC, JPMorgan, Barclays, BAML/Bank of America, DBS, Deutsche Bank and Lloyds rounded out the top 10, in that order.

It’s just one piece of analysis into the ESG-worthiness of the big banks, and surveys that produce rankings will always come and go, but they have their value alongside more objective data that can give a broad assessment of where large companies are most focused, and whether their actions are beginning to bear fruit.

As the piece highlighted, banks are scrambling to demonstrate their ESG credentials, and make some fairly major commitments to investment policies and operational change. As Impact & Influence’s Rishi Bhattacharya put it, “Many banks are in a ‘place race’ when it comes to showcasing their ESG credentials and expertise, through marketing and communications but also through their actions.”

It’s a trend that was borne out by other stories this week, chief amongst them Bloomberg’s assessment of Barclays’ intention to persuade high-net-worth clients to put their money into sustainable investment opportunities rooted around “ESG entrepreneurs”, and another piece outlining why European companies in more pollutive industries may be looking to turn to the US for future investment because of Europe’s toughening stance on the E of ESG.

It was all neatly summed up in a Forbes OpEd that proclaimed boldly, ESG is banking’s next big thing. It highlighted a PwC statistic that 76% of consumers questioned would discontinue relationships with organisations that treated employees, communities, or the environment poorly. Whether that applies as equally to banks, which consumers notoriously stick with for fear of a bureaucratic melee if they ever opt to switch providers, is less clear though.

As banks make strides to demonstrate that they’re making progress across the ESG agenda, expect to see many more statistics, surveys, reports and proclamations about who’s doing what to change things most in the sector. And, as ESG reporting increases in rigour, greater clarity on what really matters most to the multitude of stakeholder groups that are tied to the banking world.

The ESG News Review is written by Steve Earl, a Partner at BOLDT

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