Guest blog: Are you ready for a green recovery?

First published in the Autumn edition of Society Matters magazine, by Peter Toole, Strategic Relationships Director, Paragon Customer Communications

Back to Blogs & Articles Event

First published in the Autumn edition of Society Matters magazine, by Peter Toole, Strategic Relationships Director, Paragon Customer Communications

As member expectations continue to rise and regulatory pressures around green practices burgeon, sustainability could prove a key differentiator for building societies seeking to attract and retain new members and respect the values of existing ones.  But how do institutions now have a distinct opportunity to lead the way on green finance?

Organisations are under increasing pressure to play a more active and visible role in helping combat climate change, arguably none more so than a financial services industry rife with 'greenwashing'[1] and overshadowed by inconsistent measurement of emissions.
 
Keen to be viewed more positively than some of the large global banks – with the amount of CO2 production financed by Britain’s banks and asset managers nearly double the UK’s annual carbon emissions[2] – building societies are making a concerted effort to drive better sustainability strategies.
 
However, given the scale of the mountain to climb, understanding how to improve their sustainability performance remains a universal challenge. So how can institutions get ready for a green recovery?

Measuring emissions

The European Union’s Sustainable Finance Disclosure Regulation, which came into effect earlier in 2021, marked a major milestone for the industry. While not adopted in the UK post-Brexit, it was the catalyst for the UK Government to vow to establish its own domestic green taxonomy and ESG disclosure regime, central to which would be ensuring firms are accurate about their commitments to sustainability pledges.
 
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[3], 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.
 
For more information, please visit www.paragon-cc.com/en-gb/sustainability
 

 

You may also be interested in...

BSA Card
  • BSA.PressRelease Press Release

BSA comments on Prime Minister's announcements on housing

BSA comments on today's announcements by the Prime Minister

Last updated:09 Jun 2022
  • BSA.IndustryResponse Industry Response
  • Conduct Risk & Regulation

BSA response to PRA CP17/24 and FCA CP24/28 on operational resilience: operational incident and outsourcing and third party reporting

The BSA has issued a combined response to PRA CP17/24 Operational resilience: Operational incident and outsourcing and third party reporting and FCA C...

Last updated:14 Mar 2025
BSA Card
  • BSA.Event Event
  • Prudential Regulation

Suade’s exclusive dinner discussion on SDDT & Basel 3.1

A free event hosted by BSA Associate, Suade Labs Suade invites you to an exclusive dinner discussion on Thursday, 3rd April 2025, bringing together...

Last updated:13 Mar 2025
BSA Card
  • BSA.IndustryResponse Industry Response
  • Savings

BSA Response to Treasury Committee Inquiry into the Lifetime ISA

The BSA has published its response to the Treasury Committee's Call for Evidence on the Lifetime ISA (LISA). We support the Government’s aims for t...

Last updated:06 Mar 2025
BSA Card
  • BSA.IndustryResponse Industry Response
  • Thought leadership

BSA response to HMT Common Bond Reform call for evidence

The BSA and NCUF welcome the opportunity to feed into HM Treasury’s planned reform of common  bonds.

Last updated:07 Mar 2025
BSA Card
  • BSA.IndustryResponse Industry Response
  • Conduct Risk & Regulation

PRA and FCA joint consultation on Remuneration Reform

Building Societies Association response to CP16/24

Last updated:06 Mar 2025
BSA Card
  • BSA.Event Event
  • Prudential Regulation

Treasury management training for credit unions

The objective of the course is to introduce participants to the role of Treasury, providing an introduction to financial markets, yield curves and how...

Last updated:04 Feb 2025