# Financial services and sustainability: The time is now
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-04-07
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: UK Government Outlines Plans for Sustainability with
Meta Description: Discover how the financial services industry can benefit from implementing sustainable practices to meet the growing demands of customers, stakeholders, and the
URL: https://financedigest.com/financial-services-and-sustainability-the-time-is-nowhtml

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_By_ **_Keith Pearson,_** _AVP, Financial Services Industry Go-To-Market at ServiceNo_

The UK government has outlined its plans to put sustainability at the forefront of its agenda, and this requires putting pressure on businesses.  The government is not alone, as many others are pushing for changes to the system. Employees, customers, and investors are putting pressure on [businesses to implement more sustainable](https://www.financedigest.com/which-kpis-should-a-budding-business-focus-on-for-sustained-growth.html "Which KPIs should a budding business focus on for sustained growth?") practices.

Yet most executives (58%) [have little or no confidence](https://www.reuters.com/business/sustainable-business/most-executives-think-their-esg-programs-fall-short-survey-finds-2021-09-15/) in the reliability of their current ESG (Environmental, Social, and Governance)  programs, according to a report from OCEG. The disconnect implies that the C-suite is a long way from meeting the expectations of stakeholders. But as executives grapple with offering exceptional [services to consumers](https://www.financedigest.com/do-consumers-want-robo-advisory-services.html "DO CONSUMERS WANT ROBO-ADVISORY SERVICES?"), while also identifying ways to reach carbon neutrality, sustainability can often take a back seat. [Companies that do not put the environment at the heart of business priorities will face](https://www.financedigest.com/disconnected-customers-are-one-of-the-biggest-problems-facing-financial-companies.html "Disconnected customers are one of the biggest problems facing financial companies") a backlash.

This is especially important for the [financial services](https://www.financedigest.com/trends-in-the-financial-service-landscape-and-the-impact-on-fraud.html "Trends in the financial service landscape and the impact on fraud") sector, which is built on one fundamental principle: customer relationships. Entrusting an [organisation with finances](https://www.financedigest.com/cyber-threats-for-finance-organisations-to-watch-in-2023.html "Cyber threats for finance organisations to watch in 2023") requires a great deal of assurance, and if a client does not feel like a business will support them adequately, they won’t remain a customer for very long. Traditionally this relationship was based on how the customer felt they were treated personally, but consumers now expect companies to take stances on wider issues and to be aligned with their beliefs.

**The** [benefits of sustainability in finance](https://www.financedigest.com/can-finance-reap-the-benefits-of-the-cloud-without-compromise.html "Can finance reap the benefits of the cloud without compromise?")

This shift in attitude aligns with many people’s growing desire to help improve the world as well. According to a Deloitte survey investigating consumer attitudes towards sustainability, [nearly a third (28%)](https://www2.deloitte.com/uk/en/pages/consumer-business/articles/sustainable-consumer.html) of consumers have stopped purchasing certain brands or products, because they had ethical or sustainability-related concerns about them. Very few companies can afford to lose almost a third of their customer base, especially in an [industry like finance](https://www.financedigest.com/theres-nothing-artificial-about-the-role-of-ai-and-data-in-the-finance-industry.html "There’s nothing artificial about the role of AI and data in the finance industry ") where competition is stronger than ever. Sustainability within the sector therefore simply cannot be ignored.

The benefits of strong sustainability strategies do however go much further than keeping customers happy. [According to McKinsey’s research](https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Strategy%20and%20Corporate%20Finance/Our%20Insights/Five%20ways%20that%20ESG%20creates%20value/Five-ways-that-ESG-creates-value.ashx), successful ESG programs are tied to five core advantages. These include: higher top-line growth, [reduced costs](https://www.financedigest.com/home-start-lincolnshire-implements-flexible-unified-communications-service-to-reduce-costs.html "HOME-START LINCOLNSHIRE IMPLEMENTS FLEXIBLE UNIFIED COMMUNICATIONS SERVICE TO REDUCE COSTS"), minimised regulatory and legal interventions, higher employee productivity, and optimised investments and expenditures. Thinking of the environmental impact of business is no longer just a CSR initiative; it is essential to both [financial and strategic success](https://www.financedigest.com/why-teaching-your-children-financial-literacy-from-a-young-age-will-set-them-up-for-success.html "Why teaching your children financial literacy from a young age will set them up for success").

**Setting goals for the future**

If the benefits are so clear, then why are so many [financial services](https://www.financedigest.com/how-crowdsourcing-can-help-drive-the-benefits-of-advanced-analytics-in-financial-services.html "HOW CROWDSOURCING CAN HELP DRIVE THE BENEFITS OF ADVANCED ANALYTICS IN FINANCIAL SERVICES") organisations so slow to implement ESG strategies? More importantly, what can those [working in financial](https://www.financedigest.com/turning-a-blind-eye-wont-work-for-financial-firms-as-the-fca-tightens-its-grip.html "TURNING A BLIND EYE WON’T WORK FOR FINANCIAL FIRMS AS THE FCA TIGHTENS ITS GRIP") services do about it?

Despite the immense pressure from stakeholders, designing and implementing a sustainability strategy will not happen overnight. To help accelerate the changes, [financial services](https://www.financedigest.com/as-hackers-declare-cyberwarfare-financial-services-cannot-afford-to-be-complacent.html "As hackers declare cyberwarfare, financial services cannot afford to be complacent") businesses should look at existing sets of standards, such as the ones set by the Sustainability Accounting Standards Board or the World Economic Forum. These organisations help [create guidelines and goals which can then be adapted to suit the business’s](https://www.financedigest.com/how-to-create-financial-goals-for-your-business-in-2021.html "How To Create Financial Goals For Your Business In 2021") overall objectives. If a [business is accountable](https://www.financedigest.com/making-your-accountant-an-invaluable-asset-to-your-business.html "MAKING YOUR ACCOUNTANT AN INVALUABLE ASSET TO YOUR BUSINESS") to industry-wide guidelines, it will have a competitive advantage against those not following the same standards.

By aligning with these guidelines, [businesses will also display their commitment to employees](https://www.financedigest.com/why-investing-in-employee-health-can-be-good-for-business.html "Why investing in employee health can be good for business"). Given that, [65% of employees](https://www.unily.com/insights/guides/future-of-the-sustainable-workplace-in-the-age-of-covid-19-and-climate-change) would be more likely to work for a company with robust environmental policies, green policies are more likely to help retain and attract talent. This is essential given that there were [40% more financial service jobs](https://www.reuters.com/world/uk/london-financial-vacancies-jump-40-pre-pandemic-level-2022-01-17/) available in the fourth quarter of 2021 than in the same period of 2019. Being aligned with [employee beliefs is also likely to help boost morale and productivity in the workplace](https://www.financedigest.com/73-of-employees-in-the-banking-and-financial-services-industries-are-looking-for-better-physical-and-mental-wellbeing-support-in-the-workplace.html "73% of employees in the banking and financial services industries are looking for better physical and mental wellbeing support in the workplace"). Employees feel a sense of purpose within their firm, as well as a positive affirmation for the customers they serve.

**Demystifying** **the data**

Just like every other part of a business, [data holds the key](https://www.financedigest.com/sterling-edges-lower-ahead-of-key-data.html "Sterling edges lower ahead of key data") to sustainability strategy. The challenge for many organisations is the lack of integrated data-collection methods, [reporting and related processes](https://www.financedigest.com/board-report-highlights-complex-decision-making-process-across-banking-and-finance-sector.html "Board Report Highlights Complex Decision-Making Process Across Banking and Finance sector"). Many of the component parts of [ESG are scattered throughout operations and corporate](https://www.financedigest.com/green-bonds-are-set-to-drive-corporate-esg-debt-out-of-slump-in-2023-barclays.html "Green bonds are set to drive corporate ESG debt out of slump in 2023 -Barclays") departments. As we’ve seen in other areas of [financial services](https://www.financedigest.com/what-can-we-learn-from-financial-services-security.html "What can we Learn from Financial Services Security?"), the silos need to be broken down so that the data can be analysed collectively to show the value of sustainability initiatives.

Having a clear overview of data can also be a [powerful tool in communicating with stakeholders to show a business](https://www.financedigest.com/ceo-riggs-eckelberry-of-originclear-discusses-the-power-of-intuition-in-running-a-successful-business.html "CEO Riggs Eckelberry of OriginClear Discusses the Power of Intuition in Running a Successful Business ") isn’t just talking about sustainability, but also making a tangible difference in terms of hitting sustainability goals. The initiative can strengthen investor relations, build better relationships with customers and employees, and boost overall brand reputation. This can help [financial services](https://www.financedigest.com/boom-or-bust-how-the-financial-services-sector-is-coping.html " Boom or Bust: how the financial services sector is coping") companies stand out in such a competitive market.

**[It’s time](https://www.financedigest.com/why-its-time-to-adapt-to-the-virtual-world-how-to-master-online-negotiations.html "Why it’s time to adapt to the virtual world: how to master online negotiations") for change**

Being greener and more sustainable is something that will impact every part of our lives. The [key for the financial](https://www.financedigest.com/4-key-financial-trends-as-we-approach-2021.html "4 Key Financial Trends as we Approach 2021") sector is to remember that their employees and customers are watching. While committing to an ESG [strategy is a step](https://www.financedigest.com/cellnexs-ceo-tobias-martinez-steps-down-amid-strategy-shift.html "Cellnex’s CEO Tobias Martinez steps down amid strategy shift") in the right direction, it isn’t enough. Stakeholders – especially employees and customers [– want to see action and they want to see it no](https://www.financedigest.com/customer-engagement-whos-leading-the-way.html "Customer engagement – who’s leading the way?") w.


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