Banks continue to road test sustainability strategies
Adopting a framework for strategic sustainability goals
Most banks that are in the process of developing their sustainability strategy, building their ESG roadmap and informing their key business decisions, integrate the Sustainable Development Goals (SDGs) and the Paris Agreement objectives as reference frameworks.
In terms of frameworks used for setting targets, some 35% of all banks reviewed have initiated the science-based (SBTi)2 framework, according to the benchmark study. This is mainly across Europe, where 53% of banks use the SBTi methodology, compared to 14% in North America and 18% elsewhere.
The Paris Agreement Capital Transition Assessment (PACTA) methodology is also making progress in Europe, Australia, and South America. 84% of EU banks now use PACTA compared to 79% in the previous benchmark study.[1] [2]
However, while 83% of banks identify environmental targets to drive their sustainability strategy, only 43% identify social targets for activities. Combining various approaches and frameworks allows banks to recognise a broader range of environmental and societal sustainability targets and therefore enhance their sustainability strategies.
To further progress sustainability strategies, more banks should adopt methodologies such as the United Nations Environment Programme Finance Initiative (UNEP FI) portfolio impact assessment tool to assess results and set relevant environmental and social targets for their activities.
1. The Mazars Responsible banking practices benchmark study assesses the sustainability practices of a sample of 37 banks. We have focused our analysis on banks based in Africa, the Americas, Asia-Pacific and Europe. The banks selected are the largest in their respective geographies by total assets.
2. Science-based targets provide companies with a clearly-defined path to reduce emissions in line with the Paris Agreement goals. More than 1,000 businesses around the world are already working with the Science Based Targets initiative (SBTi)