Banks can profit by helping businesses implement ESG – Greenwich Coalition

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Banks can strengthen existing customer relationships and acquire new customers by helping businesses understand and implement sustainability standards, especially with respect to corporate finance and treasury functions, according to a report by Coalition Greenwich, an analysis firm owned by S&P Global.

Many companies have adopted environmental, social and governance-related titles, with green bond issuance more than doubling year-over-year in the first nine months of 2021 to $ 365.2 billion , according to Markets Media data cited in the report.

However, beyond ESG-related funding vehicles such as these, many CFOs and corporate treasurers do not know what “environment, social and governance” is. means for their services, and banks that act quickly on such issues could create a long-term competitive advantage, the Greenwich Coalition said. Banks can help companies determine how they should apply ESG standards in corporate finance, treasury operations and across their organizations, he said.

“We need our banks primarily for financing, but also for advice,” a representative of a large industrial company told the analysis firm.

Corporate banking

Companies should soon start taking ESG performance into account, if they aren’t already, when allocating their banking activities, the Greenwich Coalition said.

Of a group of large companies surveyed, 28% said ESG capabilities influence how they allocate business to banks, compared to 2020. This figure is up from 24% in 2019 and 16% in 2018. The share is much higher in some countries, such as Norway, where the figure is around 50%.

Trade finance

ESG considerations in trade finance have accelerated in the wake of the COVID-19 pandemic, according to the report.

“Expertise in sustainable finance” is considered a key criterion when selecting a trade finance provider by 16% of large companies in Europe compared to the year 2020, compared to 3% for 2019. Countries Nordic countries, Germany and the Netherlands were the top three regions in Europe where respondents cited thExpertise in sustainable finance is a primary consideration.

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