Faced with the prospect of having to provide members with ESG-related information on the provision of their services and financial products, monitoring carbon emissions has become an integral pillar of sustainability.
If building societies are able to monitor all aspects of their businesses’ carbon footprint, including Scope 1, 2, and arguably most importantly Scope 3 ‘financed emissions’, they have a clear opportunity to stay relevant, make a major ethical play and leverage sustainability to attract new members.
Particularly as global banks come under fire for their continued financial support of fossil fuel companies, building societies can differentiate themselves and effectively communicate how they are doing so to potential members.
Lessening the financial risk
Of course, monitoring their carbon footprint is not simply about differentiating themselves from the competition, and doing the right thing for the environment. Rather, it is about mitigating the risk of doing nothing and the associated reputational and financial implications, as regulators become more intense in their approach
to addressing pollution.
The lack of an industry standard for measuring carbon emissions on everything from communications to scope 1, 2 and 3 financed emissions has proven somewhat of a stumbling block for many financial institutions. While a lack of ownership of sustainability strategies has proven a difficult hurdle to overcome for a number of building societies, especially when competing with large financial institutions who have the luxury of dedicated heads of sustainability.
However both remain central themes of sustainability, and ones which building societies must get a handle on in order to differentiate themselves.
A valued partner
In an era when sustainability is critical to building societies, having the support of an expert partner committed to assessing and improving the sustainability footprint throughout the lifecycle of business operations, can be fundamental to success. This should touch every part of the business from sound due diligence in the supply chain, ethical business practices, staff satisfaction and retention, efficient production, facilities management and effective relationships with all stakeholders.