Global alliance of banks calls out ‘greenwashing’

In the backdrop of the COP27 Climate Change Conference in Egypt (6-18 November), a leading global network of values-based banks calls upon the financial sector to back up its rhetoric with actions.

The Global Alliance for Banking on Values (GABV) marked "Banking on Values Day" on 10 November by reaffirming the crucial role that banks have to play in tackling the root causes of climate change.

At the COP27 "Finance Day,"  the GABV urged the financial sector, including values-based banks, to live up to its commitments. 

In last year's COP26 Conference in Glasgow, UK, mainstream financial institutions issued welcome public commitments and declarations designed to tackle climate change and help facilitate the move towards net zero.

One year later, many continue financing the fossil fuel industry at an industrial scale. A recent report by Finance Watch estimates that 60 of the largest global banks still have around $1.35 trillion of exposure to fossil fuel assets.

Martin Rohner, executive director, GABV: "Banking is never neutral – institutions make decisions about what they finance and invest in, and these have major impacts on the shape of our collective future. Over recent years, mainstream banks have increasingly positioned themselves around their social purpose and environmental goals. This rhetoric must be backed up by real commitments and action."

Observing "Banking on Values Day 2022" on November 10 in Dhaka, Bangladesh, on the sidelines of the annual meeting, the GABV and its members called out the increasing use of "greenwashing" vocabulary in the financial industry.

With the theme "Real Impact Behind the BIG Words", the campaign focuses on how values-based banks mean what they say and deliver real impact. At the global virtual panel discussion, the leaders vowed to create awareness about the risks of greenwashing and what it means to aim for real impact.

Selim RF Hussain, MD and CEO of Brac Bank; Priscilla Sims Brown, CEO of Amalgamated Bank USA; and Damien Walsh, CEO of Bank Australia, took part in the discussion as the panellists.

Selim RF Hussain said, "Collaborative effort is okay in sustainability. We must work closely with the industries and show the long-term positive impact that inspires them to commit themselves to real action. 

"Through the observance of Banking on Values Day, we can disseminate the message to a larger audience and sow the seed of a sustainable banking movement in Bangladesh. Let us shape our vision and work together for the greater good and a better society."

The GABV, made up of 70+ pioneering banks, credit unions and microfinance institutions from across the world, advocates for banks to take a pivotal role in shaping the economy, society and the environment.

Members of the GABV have pioneered and helped expand initiatives like the Partnership for Carbon Accounting Financials (PCAF), a harmonised, open-source tool to measure and disclose the greenhouse gas emissions (GHG) of financial institutions' loans and investments. 

The GABV has been recently recognised as a Climate Leader by the Finance for the Future Awards and will participate in COP27 as an Observer NGO.

Values-based banks have the ambition to put people and the planet at the centre of decision-making. With strong diversity in terms of size, business model, cultural contexts or markets they operate in, they have a goal in common; to use finance to meet their communities' needs and create a positive impact.

Brac Bank pioneered small-ticket SME loans without collateral, helping grow grassroots entrepreneurship in rural Bangladesh and contributing significantly to real economy and employment generation. Since its inception, the bank has served one million SME entrepreneurs adding significant value to the economy.

More than 70% of the bank's assets contribute to the real economy. As a believer in people, planet and prosperity, the bank sees its financing intervention through a sustainability lens.

Across the world, examples of work by GABV members include – 

• The creation of a Rainbow Savings Account, which offers high-interest rates and advanced debit card facilities exclusively for the transgender community, from India's ESAF Bank;
• The implementation of a new gun store merchant code by Amalgamated Bank in the United States, which allows for suspicious activity and illegal gun sales to be reported to the authorities;
• The purchase of a private conservation reserve by Bank Australia to protect a 2,117-hectare site in Western Victoria from any future development