Bank sustainability strategy is much needed after the last 10+ years of banking scandals. In 2008 the housing bubble burst left many homes in foreclosure and many people with a new mistrust for banks. The years in between have revealed additional scandals in the banking and financial industries. This has contributed to a rise of banking customers with a fundamental distrust of banks and financial institutions. In 2016, Brunswick Group conducted a survey that revealed that only 27% of Americans trust banks and other financial institutions.
This makes it essential that your bank shows customers their character and rebuild the bonds of trust. When you develop a banking sustainability strategy, you’re committing to your corporation and external stakeholders to have a positive impact and act responsibly. The banking industry is struggling to rebuild its relationships with customers and external stakeholders. A bank sustainability strategy usually plays a part in rebuilding these tenuous relationships. Here are a few bank sustainability strategies to consider.
Bank Sustainability Strategy
It’s time to develop a plan to set your bank or financial institution above the rest of the banking industry. You can use a bank sustainability strategy to woo new customers and reassure the ones you already have. Here’s a look at four bank stability strategies to consider:
Structure of an Organization’s Governance
The way you engage with employees and customers and your institution’s ideas of responsibilities are defined by the way it’s governed. It’s beneficial to make sure that the governing body always weighs environmental and social issues in the policies it makes.
You might consider an environmental, social, and governance (ESG) oversight committee or one made up of senior executives. You want them to focus on policies that always take ESG issues into account before making decisions.
As part of your new governance system, you might consider linking ESG performance to bonuses and other forms of compensation. After choosing your bank’s corporate responsibility indicators, you can tie the success or failure in these indicators to the amount of bonuses, raises, and other financial incentives are received by those who are part of the financial institution’s governance.
Materiality Assessment
Your bank needs to find a way to identify, assess, and define how you deal with environmental, social, and governance issues. You need to do this to identify any areas where you’re lacking in ESG issues and where you’re succeeding.
Many banks already engage in some form of materiality assessment, and some of them publish the results online. Still, it’s become less a deeply thought out process and more of a nod to existing systems. It’s time to make real changes and invest time in creating new policies for ESG issues.
You can use this assessment to educate senior management of ESG ideas and discover the concerns of external stakeholders. You can use the results to determine future policies for your bank or financial institution.
Publish ESG Metrics
Traditionally, within the banking industry, financial institutions only publish their financial metrics. This includes a bank’s profit goals and its actual growth, and this information is essential for stakeholders, managers, and employees.
However, if you choose to publish your ESG metrics, it helps customers, employees, and external stakeholders see how your bank approaches environmental and social issues. You can start by publishing your ESG metrics only for internal use if you aren’t sure about the benefits of sharing them publicly.
It’s also beneficial to make ESG metrics part of your financial institution’s annual report. If you don’t want to include them in the report, you might consider adding a supplement report that provides this information for your customers and external stakeholders. It demonstrates your desire for banking sustainability and the steps you’re taking to achieve your goals.
Communicate the Bank Sustainability Strategy
It isn’t enough for your bank to create a plan and execute it. You need your customers, employees, managers, and external stakeholders to know and understand your commitments. You need to make your company’s sustainability goals public and commit to reaching them.
By announcing your commitments, you can help your bank or financial institution build momentum and help you reach your goals more easily. It also highlights your bank’s personal ESG values and the issues that you find most important.
You can energize your employees and management to reach your suitability goals by announcing them. This can also help you implement new ESG values across all departments and employees. It makes it easier for everyone to know the sustainability goals and how your financial institution expects to integrate those values as part of daily processes.
Aspiration: Sustainable Cash Management Services
Aspiration is one financial institution that has utilized sustainability to make a difference in the world around them while building long-lasting relationships with customers. This financial institution offers a variety of sustainable cash management services. These services include:
Digital Spend and Save Services
Customers need a way to use the funds in their accounts, and Aspiration offers a debit card to use almost anywhere. There are specific benefits of the card and account, including:
- +55,000 free ATMs.
- Guarantee that funds deposited aren’t used for fossil fuel exploration or production.
- Customers who roundup purchases have the option to plant a tree each time.
- Provide impact scores for businesses to help customers spend their money with companies that match their values.
- Conscience Coalition purchases offer cashback rewards.
These benefits are part of a greater sustainability program.
Investment Services
If you want to move past a simple savings account and start investing money, Aspiration can help. Their investment services benefits include:
- Professionally managed funds.
- A low $10 minimum to open an investment account.
- Investments are 100 percent fossil fuel-free.
- Fewer ups and downs than other investment accounts.
- Still open to new investors.
Retirement Investment Services
If you’re worried about affording retirement, you’ve probably already considered a retirement investment plan. The benefits of this plan include:
- It’s a traditional IRA.
- Tax-deferred growth.
- A low $10 minimum to open an investment account.
- Investments are 100% fossil fuel-free.
- Fewer ups and downs than other investment accounts.
- Still open to new investors.
You can invest in your retirement years without worrying as much about your carbon footprint.
If you’re running a bank or some other form of a financial institution, it’s essential to consider a new bank sustainability strategy. You want customers to recognize your bank as one they can trust and matches their values.
