Podcast Ep 206: Colette Shirley, director of Sustainability at Bank of Ireland, explains how the banking sector is embedding sustainability as a core pillar.
Across the world businesses in all industries are striving to embed sustainability principles in everything they do, and the world of finance is no different. Because of the role that finance plays in every sector, the banking industry’s impact is all-encompassing.
In its recent 2023 Sustainability Report, Bank of Ireland revealed how it is pursuing its ESG (Environmental, Sustainability and Governance) goals with a fierce energy, including publishing how it is doing against its science-based targets.
“We are seeing our customers taking actions within their businesses and making investments that we would consider sustainable. We wanted to make sure that that was reflected in our framework”
In 2023 the Bank issued €11.1bn in sustainability-related finance, up 35% on the previous year.
This is 85% of the way towards its own 2030 targets and 90% of its 2025 target for long-term corporate lending.
The Bank also disclosed its new Sustainable Finance Framework for classifying sustainable finance to coincide with the report.
In its first Sustainable Finance Framework, the Bank sets out detailed criteria under which lending can qualify as green finance, social finance or sustainability-linked finance across the Group. The areas covered include residential and commercial buildings, sustainable food and agriculture, energy efficiency, renewable energy, pollution prevention and control, sustainable water management, clean transportation, affordable housing, and access to healthcare.
We spoke to Colette Shirley, director of Sustainability at Bank of Ireland, about the importance of the framework.
Making the future of banking sustainable
“Within our strategy at Bank of Ireland we have embedded sustainability as one of our core pillars,” Shirley told The ThinkBusiness Podcast. “And as we set out our stall around how we want to support our customers with sustainable finance targets over the next three-to-five years.
“What this document does is categorise for our customers and stakeholders what we’re going to call sustainable finance in terms of the investment actions that our customers are taking, what we could consider sustainable, and then what product we would have to offer our customers to support those investments.”
In her role as director of Sustainability, Shirley has been driving key initiatives to support businesses as they embark on sustainability-related strategies.
Recently, Bank of Ireland, in collaboration with SSE Airtricity and Musgrave, has partnered with Business in the Community Ireland and Northern Ireland on an all-island Climate Action Pilot Programme for SMEs.
As part of this mid and senior management from 10 SMEs across the island of Ireland took part in a Carbon Literacy Programme full-day workshop at Bank of Ireland’s Cabineteely operations in Dublin.
The three-part programme provides hands-on, in-person training and support to ensure that participating SMEs across the island of Ireland are well-placed to take commercial advantage of their environmental credentials. One-to-one mentoring will be offered to each SME to receive tailored advice or guidance resulting in full-certification and graduation in October.
On the importance of the Sustainable Finance Framework, Shirley said it’s about creating transparency and aligning with EU legislation in terms of green lending.
“We are seeing our customers taking actions within their businesses and making investments that we would consider sustainable. We wanted to make sure that that was reflected in our framework.”
The framework goes beyond business to include public hospitals, schools, affordable housing and culture.
But for businesses borrowing to make their businesses more sustainable, the loan agreements will include key performance indicators (KPIs) that align with how they are reducing their greenhouse gases footprint as well as investing in their staff and community.
Shirley said that key challenges businesses face in the coming year include aligning with the new Corporate Sustainability Reporting Directive (CSRD). On the face of it, large organisations are in scope for the first raft of businesses that must comply but in reality it will impact SMEs in the supply chain as they too must evidence their sustainability progress.
“We have to start recording next year as a bank, but it impacts our larger corporate and PLC customers. They have to start taking actions in their businesses from a sustainability perspective and report around that. And similarly, most of their supply chain will also start coming under CSRD obligations over the next couple of years. So we are focused on our SME book to make sure our SMEs understand what’s coming down the line in terms of CSRD and encouraging them now about taking action.
“A lot of our SMEs are actually doing a lot around sustainability but need to be tracking it accordingly. So we’re spending time with them to understand how they can track that and invest in their business.”
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