Retail Banking and Green Economy

Retail Banking and Green Economy

Simon Thompson

Chartered Banker Institute CEO & ESG specialist

In this video, Simon delves into the pivotal role of retail banks in driving the transition to a sustainable, low-carbon economy. He explains how these financial institutions are actively promoting eco-friendly choices through their innovative "green" banking initiatives. He further explores the range of products and services, such as green mortgages, loans, savings, and investments, that retail banks offer to incentivise a more sustainable world.

In this video, Simon delves into the pivotal role of retail banks in driving the transition to a sustainable, low-carbon economy. He explains how these financial institutions are actively promoting eco-friendly choices through their innovative "green" banking initiatives. He further explores the range of products and services, such as green mortgages, loans, savings, and investments, that retail banks offer to incentivise a more sustainable world.

Now free to watch

This video is now available for free. It is also part of a premium, accredited video course. Speak to an expert today to watch more.

Retail Banking and Green Economy

11 mins 59 secs

Overview

Banks, critical to our economy, can drive the transition to a sustainable, low-carbon world. Recently, "green" banking has grown, powered by policy changes, market forces, and evolving consumer attitudes. However, green lending and investment still form less than 4% of total global lending. Diverse financial institutions, including retail banks, are essential in this green transformation. Retail banks offer green products like mortgages and loans, incentivising lower-emission homes and vehicles. They also promote sustainable business practices through green lending. This new phase of retail banking, while advantageous for banks and customers, significantly contributes to a more sustainable world.

Key learning objectives:

  • Understand the role retail banks can play in the transition to a low-carbon economy

  • Outline some of the key products being offered by retail banks facilitating the transition

Now free to watch

This video is now available for free. It is also part of a premium, accredited video course. Speak to an expert today to watch more.

Summary

What are the three main functions of retail banks? 

  • Deposit-taking: Retail banks allow individuals and small businesses to safely deposit money and save for the future
  • Managing payments: They provide an efficient and secure system for settling financial transactions
  • Extending credit: Retail banks provide loans and overdraft facilities, essential for individual home ownership and small business growth

How can retail banks facilitate the transition to a low-carbon economy?

Retail banks facilitate the transition to a low-carbon economy through "green" banking initiatives. These include providing green retail products such as mortgages, loans, savings, investments, and payment services that incentivise eco-friendly choices. They are also pivotal in reallocating capital away from high-carbon sectors towards environmentally friendly ones. Despite green finance currently being a small part of total lending, its rapid growth indicates a promising role for banks in supporting sustainable development.

What products are offered by retail banks facilitating the transition?

Retail banks currently offer a range of green products facilitating the transition to a low-carbon economy:

Green Deposits, Savings, and Payments: Banks like Ekobanken and Nordea provide green savings accounts, and CO2 trackers, incentivising customers to save and spend sustainably. Notable is Alipay's "AntForest" app, which promotes sustainable behaviour and supports reforestation.

Green Mortgages: Banks incentivise customers to buy energy-efficient homes or improve existing ones by offering attractive interest rates. Barclays, for instance, launched the UK's first green mortgage.

Green Vehicle Loans: Retail banks like Bank Australia incentivise customers to buy low or zero-emissions vehicles by offering favourable interest rates, tied to the vehicle's environmental impact.

Green SME Business Lending: Retail banks offer green loans to small businesses investing in sustainable practices. Banks like HSBC and Nordea Bank provide loans linked to sustainable investments and activities.

Now free to watch

This video is now available for free. It is also part of a premium, accredited video course. Speak to an expert today to watch more.

Simon Thompson

Simon Thompson

Simon is the Chief Executive of the Chartered Banker Institute and co-author of Green Finance: Principles and Practice. He is also a former Vice President of the European Bank Training Network, and is currently Chair of the Global Banking Education Standards Committee. He specialises in professional ethics, and green and sustainable finance.

There are no available videos from "Simon Thompson"