Yesterday I blogged about a new survey from KPMG. It finds that most companies are unable to calculate the business value of sustainability. However, the survey did identify the financial services sector as a leader in the field. Only around 20% of respondents reported being able to calculate the value of their sustainability programs. That number jumped to 33% for the banking and capital markets sector. A recent report from GFANZ echoes these results. Their report conducted 22 in-depth case studies examining how financial institutions were approaching sustainability with their corporate clients. Here’s an excerpt of their findings:
“The case studies show that financial institutions are translating assessed physical risk into financial metrics, and working to build investment and business cases. Their modeling approaches can help pull forward and quantify the economic and financial benefits of investing in adaptation upfront, over reactive responses to the acute and chronic impacts of climate change. Their lending, investment, and underwriting decisions can enable the delivery of projects — from hard infrastructure all the way through to better response protocols — which enhance resilience on the ground.”
While the global economy is still figuring out how to calculate sustainability’s business value, financial services firms are making headway. However, their approach is primarily risk-based. Quantifying the business value of risk management and climate resilience is important, but companies should also consider the opportunities sustainability provides. As financial services firms develop methodologies for quantifying sustainability value, they’ll hopefully share that knowledge with their clients. As research on the topic builds, we’ll see how much hidden value is uncovered.
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