Strategic Focus: ESG & Sustainability Strategies In Banking And Financial Services
13 Mar, 2025
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Executive Summary
The largest banks in G7 countries are financing more GHG emissions – an enormous 2.7 billion tonnes – than the total emissions of Russia. This, along with a $700 billion annual shortfall in biodiversity funding, means the banking and financial services sector is facing mounting pressure to advance sustainable development, curb environmental risks and bridge critical funding gaps. In response, the sector is undergoing a significant transformation, increasingly adopting proactive sustainability strategies for building a resilient and inclusive financial system. This report provides an overview of the unique challenges that the sector faces and highlights strategies that the C-Suite can adopt to align with global sustainability goals.
Summary for decision-makers
Financial services are the throbbing pulse of a truly sustainable world
Sustainability priorities for the banking and financial services sector
The sector faces multifaceted challenges to integrate sustainability within business functioning
Financial services firms must embed sustainability into their core business offerings
The sustainability market can equip the industry to drive ESG innovation and financial resilience
Financial services are the throbbing pulse of a truly sustainable world
Sustainability priorities for the banking and financial services sector
The sector faces multifaceted challenges to integrate sustainability within business functioning
Financial services firms must embed sustainability into their core business offerings
The sustainability market can equip the industry to drive ESG innovation and financial resilience
Figure 1. Verdantix segmentation of the banking and financial services sector
Figure 2. SDGs and the banking and financial services sector
Figure 3. Sustainability initiatives in the banking and financial services sector
Figure 4. Glossary of sustainability-related terms
Figure 5. Regulations, guidelines and voluntary frameworks for the banking and financial services sector
Figure 6. Greenwashing accusations in the banking and financial services sector in 2024
Figure 7. Examples of industry groups and alliances advancing sustainability agendas in the banking and financial services sector
Figure 2. SDGs and the banking and financial services sector
Figure 3. Sustainability initiatives in the banking and financial services sector
Figure 4. Glossary of sustainability-related terms
Figure 5. Regulations, guidelines and voluntary frameworks for the banking and financial services sector
Figure 6. Greenwashing accusations in the banking and financial services sector in 2024
Figure 7. Examples of industry groups and alliances advancing sustainability agendas in the banking and financial services sector
IAG, CalPERS, Organisation for Economic Co-operation and Development (OECD), Task Force on Climate-related Financial Disclosures (TCFD), Monetary Authority of Singapore (MAS), Vanguard Investments Australia, Greenomy, Sustainable Energy Finance, Climate Bonds Initiative (CBI), CPP Investments (Canada Pension Plan Investment Board (CPPIB)), Goldman Sachs, EY, Global Investors for Sustainable Development Alliance, Sustainable Markets Initiative (SMI), Sustainalytics, BlackRock, European Central Bank, Prudential Financial, European Sustainable Investment Forum (Eurosif), CIBC, Simmons & Simmons, Credit Suisse, ING, KPMG, Federated Hermes, Safaricom, Bank of England, Net Zero Asset Managers (NZAM) initiative, Partnership for Carbon Accounting Financials (PCAF), EQT Group, Insurance Development Forum, Allianz, Bloomberg, Stichting Pensioenfonds ABP, Federal Court of Australia, Reserve Bank of India (RBI), JPMorgan Chase, AXA, Task Force on Credit Enhancement for Sustainability-linked Sovereign Financing, Apple, Aviva, Global Alliance for Banking on Values, Industrial and Commercial Bank of China, Taskforce on Nature-related Financial Disclosures (TNFD), State Street, Boston Consulting Group (BCG), Responsible Investment Association Canada, Australian Prudential Regulation Authority (APRA), European Commission, NatWest Group, Iberdrola, Frankfurt Public Prosecutor’s Office, Nippon Life, The People’s Pension, ClarityAI, UK Department for Energy Security and Net Zero, UN Environment Programme (UNEP), Finance for Biodiversity Foundation, Japan Post Bank, CVC Capital Partners, Sweep, Block, The Alliance for Green Commercial Banks, European Investment Bank (EIB), UN Principles for Responsible Investment (UNPRI), International Organization of Securities Commissions (IOSCO), Novata, E.SUN Bank, US SIF, ISS, Wells Fargo, WisdomTree, Equator Principles, Investors for Paris Compliance, The Good Economy, ERM, International Finance Corporation (IFC), BNP Paribas, Kirkbi, France Autorité des Marchés Financiers (AMF), Bank of America, Climate Action 100+, University of Cambridge, Lloyds Banking Group, Calvert Impact, Cube Highways Trust (Cube InvIT), Invesco Advisers, IRPC Public Company Limited, Glasgow Financial Alliance for Net Zero (GFANZ), World Bank, Institute of Sustainability Studies, Dutch Association of Investors for Sustainable Development (VBDO), US Federal Reserve, TD Bank, Hong Kong Securities & Futures Commission (SFC), AIG, Science Based Targets initiative (SBTi), Banco BBVA, Ontario Securities Commission (OSC), Scottish Widows, Barclays, DWS, Deutsche Bank, Responsible Investment Association Australasia (RIAA), PayPal, Institutional Investors Group on Climate Change (IIGCC), Legal & General, BMO (Bank of Montreal), US Securities and Exchange Commission (SEC), Danske Bank, Scotiabank, MSCI, Clayton Dubilier & Rice (CD&R), Universities Superannuation Scheme (USS), UK Department for Environment, Food and Rural Affairs (Defra), HSBC, UK Sustainable Investment and Finance Association (UKSIF), UK Advertising Standards Authority (ASA), Development Bank of Wales, Royal Bank of Canada, UK Financial Conduct Authority (FCA), Kasikornbank (KBank), Quebec Autorité des Marchés Financiers, PwC, Citigroup, UK HM Treasury, ClientEarth
About the Authors
Priyanka Bawa
Senior Analyst
Priyanka is a Senior Analyst at Verdantix, where she leads research to enable sustainability leaders and services firms to analyse shifting market dynamics and evaluate innova…
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Kim Knickle
Research Director
Kim Knickle is a Research Director at Verdantix, bringing more than two decades of analyst experience to the evolving world of sustainability. Her current research spans ESG a…
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