Tomorrow’s green economy is taking shape. ESG objectives are at the top of the agenda for almost all FIs, both in APAC and globally. Regulators and governments will continue to play a critical role in driving ESG outcomes. In addition, a diverse set of stakeholders are also helping to shape the agenda. Clients, investors and wider society are all making decisions based on ESG criteria.

This article considers the current trends and challenges for corporate banks by exploring:

• The path to reaching net zero financed emissions;
• Managing external stakeholder perceptions by aligning communications, values and actions.

The article then considers the internal changes needed for an FI to embrace the shift from Corporate Social Responsibility to being a Socially Responsible Corporate, as well as considering the way
forward for FIs. Much of this is unchartered territory for FIs. Measuring carbon emissions and understanding a client’s performance against a broad range of ESG expectations is not within FIs’ traditional remit.

Data is, as ever, essential. Successfully navigating the changes ahead will require difficult decisions be made. While such decisions will never wholly be based on the output of an analytics model, data is nonetheless a critical element to support and guide decision makers on their path towards a greener, more sustainable future.