The big picture: how Chief Sustainability Officers can drive the banking sector’s sustainability efforts
Brussels, 15 June 2022
Expectations are increasing for all businesses – including banks – to take the lead on systemic changes covering major societal issues such as climate change as well as broader sustainability. Banks, which are acutely aware of this important responsibility, seek to use their unique position as financiers of households and companies to contribute to the shift towards a more sustainable economy and society.
For both those who are financing and those who are financed, embracing sustainability means abandoning ‘business as usual’. Within a bank, shifting their financing towards sustainable activities requires a clear organizational purpose, a new attitude and holistic approach across all business lines. Banks’ own efforts must be complemented by the collective and coordinated efforts of businesses, governments, public organizations, NGOs and citizens. Finally, achieving sustainability also requires pragmatic policy choices at all levels and support from the highest level of management.
Against this background, Chief Sustainability Officers (CSOs) within banks are emerging as a powerful new addition to the C-suite. As findings of our report show, there is something truly new about CSOs, who are quite distinct from the long-standing Corporate Social Responsibility (CSR) area. This is significant. While CSR activities contributing to societal goals have often been complementary to pre-existing bank objectives, sustainability requires the integration of environmental and social objectives into the core business of a bank – and therefore requires aligning of the entire strategy of a bank with its ability to achieve positive impact. This requires strong leaders with solid knowledge of the core business of a bank, combined with multidisciplinary skills and decision making powers.
There is no one way to define a CSO, other than as a versatile individual who needs to act in different capacities as an agent of change, mediator, coordinator, influencer, business leader and a trusted colleague in a challenging and rapidly evolving business and regulatory environment paired with the growing expectations of stakeholders. As also illustrated in our report, there are different titles attributed to sustainability leaders in organizations. What is clear is that a CSO is not a “super manager”. Sustainability cannot be dealt with single-handedly by one position or one team, no matter how well-defined or well-resourced, and success depends on the coordinated efforts of all people within the organization. On the other hand, a clear job description with authority, resources and links to the top leadership of a bank are vital to allow the CSO to steer, accelerate and reinforce their bank’s sustainability journey. We hope that readers will find our report useful to understand the evolving role of CSOs, their relevance within their organizations, the challenges they face and, ultimately, their contribution to achieving banks’ sustainability strategy and goals.
In this context, I am also happy that the EBF has established a “CSO Roundtable”, a platform of around 30 sustainability leaders from banks who meet regularly and generate new insights, share best practices and explore collective action on sustainability and climate issues. We believe that a regular dialogue at European level will complement CSO’s efforts within their individual banks and further enhance the banking sector’s contribution to the European Union’s sustainable transition goals.
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.