Almost three quarters of all UK banks are embracing digital technology to make their business operations greener.
In fact, two in five banks are using intelligent automation and digitising all paper processes in a bid to be more sustainable, according to new research by Censuswide, and shared with City A.M. today.
This was followed by helping customers to be greener by encouraging less travel to the branch (39 per cent), collaborating with suppliers and partners for extracting maximum value across the global supply chain, for example from data centres (37 per cent) and machine learning (36 per cent).
The firm also found that those banks that implemented sustainable banking initiatives saw the benefits of doing so, with two in five UK banks reporting cost savings and customer retention and growth through harnessing sustainability initiatives.
Not taking full advantage
Despite the adoption of digital technologies to improve sustainable outcomes, the research reveals that banks aren’t taking full advantage of them with less than half of UK banks (45 per cent) planning for sustainability initiatives, citing the main barriers as COVID-19 (31 per cent), industry demands (31 per cent) and long term commitment to execution (26 per cent).
“Sustainable finance creates huge opportunities for the banking sector, and in addition to supporting clients transitions towards sustainability, banks will also need to become much more sustainable themselves, not only for their financed emissions, but for their own activities and operations,” commented Dr Ben Caldecott, Director, Oxford Sustainable Finance Programme, University of Oxford and COP26 Strategy Advisor for Finance at the UK Cabinet Office.
“The banking sector is where the financial system and the real economy meets. It is in the interests of banks to move quickly given the scale of the opportunities and the risks that are already materialising. Banks need to develop comprehensive strategies, together with detailed plans for implementation tied to appropriate resourcing and levels of accountability to ensure implementation,” he continued.
For example, by enabling investments in digital capabilities, such as platforms that enable new forms of client engagement with sustainability and impact investing.
“Critically, it is also in their own commercial interests to do so and they should not wait for regulation or the enforcement of recently updated regulations,” Caldecott noted.