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.
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.
For the second year running, Mazars publishes its responsible banking practices report to assess how banks embed sustainability into their commercial practices. The Benchmark provides welcome evidence that banks are taking steps to set and achieve internal sustainability targets and to address the market need for responsible products. The finding that 78% have launched Green Bond programmes is very encouraging, but the lower number of customer facing products (32%) suggests that there is an opportunity for Irish and European banks to differentiate in this space and meet a market need.
The audit profession faces a decisive moment: market expectations are shifting, technology is empowering auditors and strengthening quality, the case for audit’s evolution is growing and a series of headline corporate failures have raised questions about the quality of service companies can expect.
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.