What role and impact do banks have in the corporate sustainability revolution?

15. June 2023

What role and impact do banks have in the corporate sustainability revolution?

Banks are a vital part of the economy’s circulatory system and society. They have an essential role in either supporting or hindering progress in reducing their carbon footprint through their financing and lending policies. Since 2015, SEB, in collaboration with Ajujaht, has encouraged teams to apply for SEB’s special award for future companies. In this article, SEB Bank’s experts discuss the growing role of sustainability in business.

“Sustainability is increasingly influencing business and the economic environment. This is due to various new regulations and expectations, but even more so due to the expectations of shareholders, investors, and customers. Therefore, sustainability is at the heart of SEB’s business strategy and is a cornerstone of our business strategy,” commented Allan Parik, CEO of SEB.

SEB’s goal as a bank is to push clients and society toward a better and more sustainable future. “Our bank’s carbon footprint depends on 99% of the clients we work with and the sectors and projects we finance. SEB’s aim is to accelerate the movement of people, businesses, and society towards a sustainable future,” emphasized Tatjana Vakulenko, Head of Sustainable Banking at SEB.

Allan Parik, CEO of SEB

SEB’s investors have high expectations, and clear commitments have been made to them. “For example, we have pledged to reduce the credit risk associated with fossil energy in our loan portfolio by 50-60% by 2030, which is a significant reduction compared to the 2019 level. At the same time, we have committed to actively contribute to the growth of green products and sustainable financing and investment opportunities,” described Vakulenko, adding, “We aim to achieve these goals through financing transformation and guidance, rather than prohibition and business closures.“ It’s essential for companies to want to move toward a greener future, and the bank can then support the plan as a partner.

Tatjana Vakulenko, Head of Sustainable Banking at SEB

A better footprint also means a competitive advantage

We must not underestimate the awareness of consumers, as they increasingly shape their preferences based on the carbon footprint of products or services.

“The biggest challenge is how to collect all the necessary data to determine our carbon footprint. It is essential that this data is comparable and reliable across companies and economic sectors. This data is what will affect future financing. Financing CO2-intensive industries will become more expensive in the future,” commented Parik.

Sustainability is certainly not limited to CO2 emissions and green products for SEB; it means much more. They focus on employee development, health, and diversity. “Flexible working hours, providing learning opportunities, employer pension plans, health insurance, and more. In addition, sustainability also encompasses how we give back to society. As a bank, we can contribute through an ethical and transparent business culture, share financial expertise, and participate in various sponsorship projects. All of this aims to contribute more broadly to society and support those in need,” explained Parik.

Let’s not lose sight of the long-term and stay focused on larger goals. SEB, as a bank, is by your side and ready to support you on this journey because sustainability is here to stay.

Initiated by

The Ajujaht accelerator programme and TV competition is a collaboration between the public and private sectors and is created by Enterprise Estonia.

Initiated by: EAS