Corporate Social Responsibility: The Expanding Role of Banks as Environmental Stewards
Credit to Author: Kim Tremblay| Date: Tue, 02 Jan 2018 16:18:05 +0000
As we wrapped up 2017 and looked toward 2018, I began a small research project to determine new and better ways to help our banking and financial services customers with their biggest sustainability and operational efficiency challenges, ie. corporate social responsibility, and what I found surprised me.
I already knew that sustainable operations fit into corporate social responsibility goals but I never realized just how much our financial services clients were doing to drive a low carbon future for our planet. Global banks are no longer just seeking to be good corporate citizens with a few token deeds, rather they are out to change the world by increasing energy security, reducing the negative impacts of industrialization in emerging economies, and financing a more sustainable energy system. According to Goldman Sachs environmental stewardship report, it really comes down to technology, capital and policy.
We see our financial services customers investing in clean energy start-ups and putting that same technology to use in their businesses. They do this to drive down their own carbon footprints but they are also making that same technology available on a broader scale throughout the world. They are using their capital to invest in businesses that share their common values and those that demonstrate a commitment to the environment. An example of this is Citigroup’s recent investment in the Block Island Wind Farm project here in my home state of Rhode Island. In Oct. of 2016, Citi provided financing for the first-ever offshore US wind farm. The now operational wind farm will lower carbon dioxide emissions by 40,000 tons each year and is expected to save Block Island residents as much as 40% off their energy bills.
Many global banks are using their capital to invest in projects like wind farms and solar.
Companies like HSBC, are implementing capital lending policies before financing projects that could have potential negative impacts on the environment. One example is the Palm Oil industry that is known for taking over large swaths of indigenous lands in southeast Asia. The Palm Oil industry is responsible for burning forests which destroys the natural habitat for many endangered species and creates a smoky haze across large parcels of deforested earth. In early 2017, HSBC took a big step forward for forest protection by pledging to end funding for destructive palm oil companies in Indonesia.
And, the global banks are putting together policies and checklists in the areas where they see growth and potential environmental risk. One such example is Citigroup’s Environmental and Social Framework which is designed to not only create value for the company but create prosperity for future generations by addressing serious threats to society and natural capital like climate change, water scarcity, the loss of biodiversity and other critical sustainability issues. Citi, like many other global banks, establishes internal governance and reporting which ensures that the policies are followed both externally and within its own operations and supply chain.
At Schneider Electric, we share the same vision as our global financial services clients to deliver prosperity and energy as part of our corporate social responsibility. Our aim is to improve usage comfort and safety while sharply cutting – at the lowest cost – energy consumption and carbon emissions in keeping with the new landscape of decentralized, carbon-free and digitalized energy production. We believe that access to energy is a fundamental human right, and we intend to innovate to help over 1 billion people on Earth who do not have access to energy and the 10% of inhabitants who face energy insecurity. We will do this by developing affordable and reliable, low-carbon solutions as well as through global public and private partnerships like the One Planet Summit to fight climate change.
To learn more about Schneider Electric’s sustainability strategy, visit our corporate site, and if you are financial services client looking to put sustainability at the heart of your operations, find banking solutions for corporate social responsibility, here.
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