Banks may take a generation to get sustainability right
Royal Bank of Scotland's chief sustainability officer Andrew Cave has said it may take an entire generation in banking to overhaul the culture within the industry to make it fit for purpose with regards to sustainability.
During a recent webinar, Cave said that RBS and the banking sector in general was still suffering fallout from the credit crunch bailout and public distrust.
“We’ve been questioned on pretty every level in terms of what sustainability is, be that the financial sustainability, the basics of business model and then also the broader questions around culture ethnics and conduct,” he said.
The behavioural aspects of sustainability presented the biggest challenge, Cave added. “On a narrow measure of more traditional sustainability issues around environmental performance, we’ve made good progress … but we are under no illusions, we’ve got a long road ahead of us.
“It may take a generation in banking to overhaul the existing cultures and to make sure we get the culture doing the right things every day.”
RBS is currently undertaking a comprehensive programme of work to overhaul its culture, but Cave said it was very much work in progress. “We are a couple of years in to a major rebuild,” he revealed. The bank has previously told edie that sustainability is crucial to rebuilding consumer trust and repairing the bank’s reputation.
However, according to Cave, the business model of banking – certainly within the UK – presents difficulties as it is based around offering free services to a huge number of customers in the form of current accounts.
“Of course it can’t be free, there is always cost in the system and a model like that creates a range of challenges. When you have a whole sector where you have a difficult business model it drives a whole raft of sustainability challenges,” he maintained.
Given the banking sector’s environmental impacts are somewhat less tangible than other industries, engaging employees on sustainability issues can be tricky, but Cave said certain approaches carried visibility.
“Over the last couple of years there’s been a clear move away from printed statements to online statements and online banking generally, so our overall footprint is probably heading in the right direction,” he noted, arguing that the more important area was assessing impacts of customer businesses.
“At the big business end we have an environmental social ethical advisory team who have a number of different policies setting out our expectations of a range of different high impact sectors and we apply those policies to screen deals.
“We also have a green banking team who are fronting up our efforts to bank more green and low carbon businesses across the UK and beyond.”