“It’s the sectoral expertise applied across banking with a lens of sustainability that’s important.”
As the world moves forward with actioning the commitments made at COP26, and we hear more about the collective commitments of the finance sector, we need to be just as ambitious about building capacity, capability, and cultures. Put simply, we will not achieve the objectives of the Paris Agreement, and net-zero commitments, without moving from what is currently best practice in a few advanced institutions, in terms of embedding sustainability within lending and investment decisions, to a point where this becomes standard practice across finance.
We don’t need thousands more sustainability specialists in banks and financial institutions. What we need are millions of bankers and finance professionals doing what they already do but incorporating the principles and practices of green and sustainable finance into those activities, in particular lending and investment decisions. Achieving this requires an alliance of educators, trainers, financial institutions, professional bodies, universities, and many more, all of us aligning our education curricula, our qualifications, and our CPD for finance professionals with green and sustainable finance principles and practice. At the moment, however, it’s very fragmented.
Here in the UK, we have the Green Finance Education Charter, which helps many of the leading professional bodies in the finance sector harmonise and co-ordinate approaches to sustainable finance, but there’s nothing like this at a global level. If there’s one thing I would like to see beyond COP26, it would be a more ambitious global coalition on finance skills for net zero being developed and launched, and I am working on this myself at the moment.
Waiting for collective action doesn’t mean we stand still in the meantime, however. From next year, the Chartered Banker Institute will move beyond offering standalone qualifications in green and sustainable finance, and climate risk, and integrate this into our core professional qualifications.
In the future, when an individual becomes a Chartered Banker, they will study green and sustainable finance as standard; credit and lending modules will cover how climate risk affects credit and lending decisions; and risk management will educate future professionals on the way in which climate, environmental and other sustainability risks impact on other risk types and on risk management overall. When studying strategic management, bankers will learn about how to align strategies and operations with the UN Principles for Responsible Banking and other global frameworks.
This is a big piece of work for us. The reality, though, is that the transition to net zero impacts every economic activity, every economic entity, every firm, and every community. And that includes every banking and finance professional, and the Chartered Banker Institute too.
Green Finance Education Charter
Education Charter (greenfinanceinstitute.co.uk