The challenge
- The Chief Sustainability and Risk offices of a European corporate and investment bank with significant exposure to carbon-intensive industries were looking to get their largest client groups (loan and bond portfolios) to embrace the energy transition.
- Risk and Sustainability teams would like to see these client groups progress their decarbonisation efforts and also reveal their climate commitments with a clear timeline.
- Front office and Relationship Managers closest to the different client groups were also consulted on the planned initiative. They were cautious and reluctant to approach clients with (arbitrary) requests with the fear that they might either frustrate their clients or, worse, lose them to competitors.
- Corporate clients typically pursued by multiple financial for their sustainability credentials could have responded adversely and reduced their business or moved elsewhere.
How we helped
- Scheduled meeting with RMs/Front Office, understood their viewpoint and got buy-in to explore the idea of running a pilot with select clients.
- Designed pilot questionnaire that revealed clients attitudes towards both the energy transition and incentives for changing course.
- Executed pilot survey after customising the survey to be sector-specific (e.g. oil and gas, shipping, commodities, etc.)
- Worked with the Risk and Sustainability team to design a green rating scale for client groups with clients rewarded with higher ratings awarded for greener actions taken and committed in the near term.
- Supported the Risk and Sustainability teams by with survey execution.
The impact
- Front Office and Relationship managers were comforted that their Tier 1 relationships were managed carefully.
- The bank’s nuanced approach was appreciated by the surveyed client groups.
- The Risk and Sustainability teams benefit from the 3rd party involvement and the partnership that centered on respecting incentives of all stakeholders
- The bank’s green credential received a boost once it documented the supportive framework it adopted for progressing the energy transition; it received endorsement from numerous internal and external stakeholders, including not-for-profits for the transparency and clarity this brought to its business.