The last Sustainable FinTech Meetup of 2019 took place on the 5th of December together with the Basellandschaftliche Kantonalbank (BLKB) on the topic of sustainability in the banking sector, where it currently stands and whether it could become a unique selling proposition (USP) for Swiss banks.
Marilen Dürr, responsible for strategy, innovation and sustainability at BLKB, started the inputs by a quick presentation of the development of their overall sustainability, or as they call it, “future orientation” concept and strategy. In the past, one major reason for the integration of sustainability in business and banking was due to risk assessment. This approach makes sense, however, at BLKB sustainability is not only understood to help assess and minimize risk but rather as a chance for new business models to win new employees or to grow beyond normal, usual banking products and services. They aim to develop new, innovative, sustainable products and services, which might not be expected to be developed or provided by banks (yet).
One major challenge the BLKB faced was defining sustainability and its perception/understanding among internal and external stakeholders. As many of them already had an understanding of sustainability, which often mainly focus on the ecological dimension, they decided to continue to speak about “future orientation” instead, allowing the definition and implementation of a new understanding of sustainability. From there on, the BLKB has set itself the goal to play a proactive part in the direction of achieving sustainable development and in implementing the Paris Agreement, before actual regulations or the law will require them to do so.
Andreas Holzer, investment specialist at BLKB, then took over and gave us an insight into how the BLKB is integrating sustainability criteria in its financial products and services. Since we are facing a changing world due to climate change, resource scarcity as well as developments concerning human rights and their violations, our society and political actors will (have to) change their behaviour. This has an immediate impact on companies and banks and how they do business. The BLKB therefore has set itself the standard to offer “future oriented” portfolios to its clients, which target such changes. In fact, all BLKB products already systematically integrate ESG (ecological, social, governance) criteria. As clients have different levels of knowledge and awareness towards ESG and sustainability criteria as well as different motivations towards taking them into account, they made sure that their client advisors are specifically trained on the topic and can give individual advice to clients. Which makes it a USP of the bank. Furthermore, their other USP is their regional focus, their good reputation as well as the fact that all their investment products are taking ESG criteria into account.
Andreas Holzer giving us an insight into BLKBs sustainable investment strategy.
After these inputs, Fabian Steiner from Sustainable FinTech opened the discussion by asking the two, how they understand sustainable finance as an USP for banks on a national, as well as on an international level, as we are seeing it becoming more and more mainstream. At the moment, BLKB clearly understands its strategy as a USP but they actually guess (and hope) that it will actually become mainstream and that the whole banking sector will adapt to it. At the same time, banks will have to prove that they are an authentic actor in doing so and only those, who are able to do that will survive. Also, on an international comparison, Swiss banks are clearly lagging behind. If Switzerland wants to become a leader in sustainable finance, it has to hurry up.
The inputs were followed by a lively and critical discussion together with the audience.