Executive Summary
REPORT: Catalysing Bank Climate Action: Lessons from the inside
There is growing recognition of the impact that banks have on the real economy through their lending and investment, and particularly their outsized role in financing the fossil fuel extraction and deforestation that is driving climate breakdown.
What is less well-known is that some deeply concerned and committed banking professionals are fighting for change inside their institutions to address this. We call them ‘climate intrapreneurs’ – banking professionals who are seeking to embed holistic climate action within the core strategy, operations and culture of their institution.
This report shares key lessons from the 2021/22 Climate Safe Lending Fellowship – a first of its kind programme that saw a cohort of climate intrapreneurs from across the banking sector developing the skills, knowledge and networks to lead the climate transition within their institutions.
The report shares insights through four lenses:
Banking system
Our banking system, like much of Western society, has become disconnected from human communities and the planet upon which we depend for our survival. As it is today, this system is taking us further away from a climate safe world, rather than towards it. And while many banks are loudly committing to reaching net-zero, what is needed to achieve this is a total transformation of the banking system to meet a new purpose: Enabling human thriving on a healthy planet.
2. Banking institutions
We have observed that the banks moving fastest on climate are also treating this as a total bank transformation programme. They are redefining their institution’s entire corporate purpose to become a bank that finances a fair and sustainable world. They develop a plan that addresses not just their lending and investment strategies but also the institutional structures, operations and culture that underpin and enable their products and services. This requires bringing together change management capability with deep sustainability expertise and equipping all employees to participate.
Through the Fellowship we identified three key tactics that help embed climate action across a bank:
Integrating climate into all decision-making by redefining processes, policies and incentives.
Evolving the role of sustainability teams from ‘doer’ of climate strategies to ‘enabler’, using their subject matter expertise to give colleagues what they need to play their own role.
Building the climate capability of colleagues, particularly those in customer-facing roles, through providing them with training and access to resources (through staff portals), plus breaking down internal silos with staff networks, communications channels and events.
There are two very real challenges climate intrapreneurs tell us are impeding the transition in their banks: First, the combination of stakeholder pressure and limited sustainability expertise among decision-makers creates the conditions for greenwashing. Second, the practical challenge of building the institutional expertise to serve specific sectors slows the pace at which banks can withdraw from high carbon industries and replace this lost business in new areas.
3. Banking professionals
Climate intrapreneurs are the internal flagbearers for the kind of change needed within their institutions. We heard about three particular areas of focus which are giving Fellows the traction to drive greater climate action within their banks:
Gaining clarity on what is within their control to change and focusing there.
Building collective influence with networks of internal and external allies.
Fostering the buy-in of decision-makers.
Asking the question: ‘What’s mine to do?’ was a popular starting point for Fellows – opening up further exploration of what others can do, and how to support and enable their change efforts, without needing to do everything themselves.
The key approaches that enable this include:
Embracing curiosity and listening to others’ priorities, concerns and ideas.
Using stories alongside data to engage colleagues’ hearts and minds.
Adopting a mindset of experimentation.
The dominant culture within banking makes this challenging work. It’s also vitally important for intrapreneurs to cultivate resilience, pay attention to their wellbeing, and build close connections with allies and peers working towards a shared goal.
4. Climate campaigners
Bank outsiders – campaigners in particular – play an important role in influencing the scale and pace of change on climate, and in holding banks accountable to it.
Intrapreneurs want campaigners to know that climate activists like them exist within banks, and they are working tirelessly toward the same goal. Climate activists meanwhile want bankers to know that they too are well-versed in the technicalities of finance, and are keen to help find solutions to the challenges that banks are facing.
Some of the most powerful ways in which climate campaigners can help accelerate progress by banks, is by campaigning for more rigorous policy and regulation, creating accountability and sharing their expertise to build climate capability within banks.
