The world is constantly changing, so there is a need for societies to adapt to the trends and meet the contemporary demands of living. However, societies also need adequate funding to realize the massive structural changes that come with modernization. In the middle of this hullabaloo, banks and financial institutions are the ones tasked to ensure that there is enough money to support domestic and global adaptation projects for future growth. As such, there is a constant challenge for banks and financial firms to lay the foundation for a more sustainable future.
Defining Sustainability in the Banking Industry
When talking about sustainability, it’s almost a given for people to think of human projects and activities geared at protecting and preserving the environment, such as avoiding plastic packaging, following recycling protocols, and altering consumption patterns to significantly reduce waste.
But in recent years, sustainability has been linked to banking, forming what is now referred to by many industry analysts as “sustainable banking.” The concept revolves around making a profit without causing social and environmental repercussions in the long run. It also recognizes the need to establish financial products and laws that help regulate operations and ensure minimal environmental harm.
Many scholars and researchers are zeroing in on sustainable banking. One study published in the International Journal of Corporate Social Responsibility in March 2023 analyzed the different definitions of the concept and came up with one that could encompass all the aspects involved in this type of banking. According to its proponents, sustainable banking refers to the implementation of social and environmental considerations in business strategies to achieve and offer sustainably labeled products.
Going by this definition, banks and financial institutions should aim for sustainable products and services to help secure global stability and preserve resources for future generations. The goal is to cater to the needs of the present generation without sacrificing the needs of future generations, leading to a cycle of sustainability for all generations.
Different Objectives of Sustainable Banking
There are many objectives that drive banks and finance companies to work on and help achieve sustainable global banking. Business-centric advisor Tropoverse has singled out the most common among them. The first is quality of life considerations, which entail providing customers access to products and services that increase their living standards. Another objective is clean energy promotion, and this involves the endorsement of alternative energy investments instead of gas, coal, and oil. At the same time, this covers investments in technologies with lower carbon emissions.
Sustainable banking also aims to realize financial inclusivity for all. Several banks practice this by providing ethical banking programs such as microloans to small businesses in emerging markets. Finally, the last but not the least objective is sustainable agriculture. By supporting green finance legislation and environmental programs, banks and financial institutions can help increase food production and distribution, as well as the preservation of resources needed to nurture food and non-food products.
According to Tropoverse, these objectives show how the community’s well-being is front and center among the considerations in sustainable banking. This is mostly because banks and financial organizations play a big role in securing a society’s growth, success, and continued sustainability. Globally, the banking industry can assure nations that they can realize economic goals without sacrificing Mother Nature.
Black Banx’s Role and Contributions to Sustainable Banking
Black Banx, the fast-rising digital bank founded in 2014 by German billionaire Michael Gastauer, is the perfect example of a financial institution that embraces sustainable banking not only for its customers but also for its workforce. Despite its global presence and operations in 180 countries and territories across the globe, Black Banx has made significantly less carbon emissions than its rivals, be it traditional banks or fellow fintech companies. That’s because the Canada-headquartered firm follows an innovative climate approach in response to the ongoing climate change crisis.
In 2020, the digital bank introduced its sustainability program that aligns with the goals and timelines of the Paris Agreement, hoping to address the climate challenge and be accountable for its global progress. After recognizing the scale of its international operations, which involve several offices and structures in key markets around the world, Black Banx set out an ambition to become net zero by 2030. To do this, Black Banx started implementing three internal initiatives designed to reduce unnecessary use of energy and cut down on its carbon emissions.
The first initiative is called “Stay at Home,” and just like what its name implies, it motivates employees and staff to work from home as this setup results in a reduction of fuel combustion and energy consumption. Another initiative is “Go Digital,” which applies to the bank’s day-to-day operations. This seeks to replace physical meetings with video calls, saving valuable working hours and massively reducing fuel usage since employees no longer need to travel to the office or the meeting venue. The third initiative is “Work from Anywhere.” Just like the first two, this is designed to minimize energy consumption and keep operational waste to a minimum.
In line with all three initiatives, Black Banx has already declared that it will halt most of its physical operations and decrease its office spaces by 95% by the end of 2025. As of late, Black Banx runs offices in different parts of the world, including the United Kingdom, Hong Kong, Russia, Brazil, India, Singapore, Canada, China, the United Arab Emirates, South Africa, and Japan. It’s not clear which offices will be affected by this change.
“We are committed to reducing greenhouse gas emissions associated with our operations and supply chain,” Black Banx indicated on its website. “Addressing the climate challenge whilst also giving appropriate support to those we believe are committed to the transition is not simple. We also respect legitimate concerns about energy security, energy poverty, and the appropriate transition and hope we are getting the balance right. Nonetheless, our commitment to our climate ambition and strategy is unchanged.”
