CP: a successful strategy
towards sustainable banking
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Economy is a sub-system of
ecology
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Towards a Sustainable
Economy
Growth
Yesterday
Mining
Oil&Gas
Eco-efficiency
Today
Sustainability
Tomorrow
Flora &
fauna
Industry
Trade-Serv
Agriculture
$
clean
polluting
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The tools for the sustainable
banker of the 21st century
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A two-way bridge between
two worlds
Financial world
Environmental world
Ecorisks
Common language
businesses
Ecodividends
CP
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Current trends in commercial
banking
 Financial institutions are becoming
increasingly similar
 Commercial banks’ activities are
expanding in developing countries
and countries with economies in
transition
 Increasing interest in sustainable
banking
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Types of financial institutions
(FIs)
commercial banks
savings and loan associations
life insurance firms
state and local government pension
funds
 sales and consumer finance companies
 mutual funds
 insurance companies; credit unions




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Financial institutions increasing similarity
 Traditionally, different types of FI
specialised narrowly in their own
areas
 Still true to some extent, but less so
 Many FI’s are expanding their
product-ranges into others’ areas
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Sustainable banking - (1)
 banks and other FI’s are becoming
more aware of their environmental
responsibilities - both in banks’ own
operations, and in lending
 1992 Earth Summit: “UNEP
Financial Initiative on the
Environment and Sustainable
Development”
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UNEP Finance Initiatives
(UNEP FI)
 Conceived at the 1992 Rio Earth Summit,
UNEP FI has grown from from 6 banks to some
270 financial institutions by 2001.
– The UNEP FI is a voluntary pact between UNEP
and some 270 financial institutions globally
– UNEP FI promotes sustainability excellence
across the finance sector
– UNEP FI builds the business case for Financial
Institutions and Insurers to become
sustainability leaders
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Sustainable banking - (2)
Some banks are moving from a traditional
defensive position:
- non-active
- deny banks’ responsibilities for
environmental impacts
- resist environmental legislation
towards …..
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Sustainable Banking - (3)
…. Sustainable banking :
- Proactively seek environmental cost savings
- Recognize possible environmental effects
on project’s and firm’s risks
- Set up special environmental funds
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Opportunities for the clients and FI
Business’ derived
environmental
liabilities and risks
 Capital Costs
 Operating
costs
 Market share
Reduced
assets value
CP opportunities
for client
IMPACT ON FI
Financial
 Repayment 
u Asset value
u New business
Legal liability
Potential legal
liability
u Fines
u Clean up
 Long term
 efficiency
 costs
New market
opportunities
Inherent
preventive
approach
pollution liabilities
Damaged
reputation
 REPUTATION
Better
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reputation