Was watching Al Gore a couple of days back elucidating on the need for "stepping on the gas"-metaphorically speaking of course. In the race to conserve our environment and the planet, was very curious on the role that could be played by banks and financial institutions in this direction. Posted questions on Linkedin, read the Equator principles again, observed the recent frenzy in carbon credits, scanned the absolute lack of greenery at our workspaces and became conscious of the gas guzzler that I was driving to work each day.
Banks and financial institutions can play roles in three broad areas to drive forward this movement:
a. Customer Transactions : There is an extraordinary amount of paper that is utilized daily in conducting retail transactions, be it in loan application forms, writing cheques or ATM and POS charge-slip printouts. The obvious but arduous path lies in the movement to electronic paperless formats. The challenges, as you would be aware lie in.....
i. Regulatory reforms required
ii. Shift in Consumer Attitudes &
iii. Revamp of transactional systems
The tipping point lies not in the above, but in economic incentives from governments for banks to invest in making that shift. The rest would gradually follow. And what could the nature of incentives be....A few thoughts (rather wild perhaps!)
i. Measure usage of paper per customer
ii Enable tax deductions basis the reductions achieved
iii Issue Green credits (similar to carbon credits) which could be traded!
Quite easily said of course...but am confident that the gaining momentum in Corporate Social Responsible (CSR) initiatives would also translate to a path down the green road in the coming years and push banks to lobby with governments and central banks for the same. Do not believe sufficient political intent lies currently with governments to take the first step.
b. Green Lending : There are several banks globally who specialize in lending towards eco-friendly initiatives - windmills, solar panels, low emission plants etc.
The Equator principles present another angle towards defining principles for lending to organizations and projects that follow prescribed norms towards conserving the environment and following reduced pollution norms.
Banks would do well in developing expertise in the above areas and defining policies that ensure that "green principles" are at least examined at the time of evaluating lending norms
c. Enlighten your Employees : Nothing works like dialogue, reinforcement, measure and incentives. Ask your employees to define what their understanding of going "green" means. You may be quite surprised on the responses.Most personnel believe that the issue lies in the deforestation in Brazil and the diesel guzzling buses trucks emitting carbon monoxide.
The question lies in how banks could recognize and incentivize employees to adopt car pools, rationalizing usage of paper, adopting video conferencing over flights for client meetings....
Can we have green credits which are issued to employees as well!