Some FSIs have started to divest, announced plans to withdraw from specific industry sectors with a high environmental impact, such as oil and gas, or announced a reduction of the carbon footprint of their lending activities. At the same time, organizations publish goals to increase green finance to transformative clients.
Goals and Objectives
Reduce the carbon footprint of lending activities.
Reduce the risk exposure from industries/corporations failing to go green and thus increasing their risk to go out of business.
Increase lending activities to green industries/corporations.
Add and adapt ESG risk management.
Data analytics (ESG risk modeling), ecosystem data access/APIs, customer due diligence, and know your customer
Use Case Summary
Corporate banks will become more selective about customers. This starts with the divestment from industries with high environmental impact. Driven by regulation, improved monitoring mechanisms, and stricter internal ESG policies, green finance will increasingly make it more difficult and costly for customers, that fail to go green, to obtain funding.