(29 September 2022 – United States) Alvarez & Marsal (A&M) reports that the global annual revenue for products and services connected to environmental, social and governance (ESG) goals is expected to be as high as €295 billion.
The lift in ESG goals could see European and US banks boost revenue as much as ten percent by 2030. In addition, top European and US banks have pledged up to €13 trillion to sustainable finance which is set to have a profound impact on their balance sheets amounting to 37 percent of their combined assets.
Banks are set to profit as companies borrow cash to make their operations less polluting and as investors seek to put money into funds that take account of ESG. In a ranking by A&M, European banks fare better than U.S. peers with lenders from the U.K. leading the pack.
The outperformance by British banks, and NatWest in particular with a margin of 10 percent, can be put down to strong investment and commitment across for capability areas evaluated including green product offering, alignment targets, client orientation and involvement in transition execution.
“The regional financial institutions are taking a leading role in embedding ESG into their businesses, both as an implementor in their own business models, and also as a potential source of revenue as they offer sustainable solutions to their customers. Elements of sustainability would need to be integrated fully into the business of banking, for example in the way banks examine risk, product offerings, and in the way the banking operations are run” commented A&M Managing Director and Head of Middle East Financial Services, Asad Ahmed.