This has been an exciting sustainability journey to me…I have enjoyed it as much as I was challenged by every step, and this is just the beginning!
During the first year all I had in mind was that sustainability needed to be explained in business jargon, with a well-built case for those who are not convinced with climate change arguments. In my daily life I work in the financial sector and have found a lot of skeptics about climate finance and the importance of facilitating access to finance to those that care about climate change.
Since I started at CISL the climate finance world has grown and numbers increased exponentially, however, in emerging markets there are still barriers to get this moving forward. I started with identifying (through the analysis paper-AP) what could be the role of the institution I work for in enabling the Mexican banking sector to finance energy efficiency. This role, as I summarized it in the AP, was threefold: regulatory support, financial services and capacity building.
As I was coming deeper into the barriers and opportunities, I realized that sustainability should be easy to understand, and that maybe it was not as complicated as we, ourselves, were putting it. Sustainable finance should be simple. What does it really mean to have sustainable (climate-related) practices in the banking sector? Well, since almost ten years ago the Conference of Parties (COP) has been trying to bring a concept for climate finance, until in 2015 the COP21 referred to climate finance as “the resources that should be allocated by the countries’ governments and private sector, to finance activities that can mitigate the impact of climate change”. Based on that, I defined the areas upon which the banking sector could be supported, trained and assessed in terms of sustainable or climate finance, so that banks can easily understand at least a portion of what a bank can do to mitigate the impact of climate change. I defined four main areas, which I cover in my dissertation (Eco-efficiency, environmental risk management, products and services offering, and strategic commitment).
I still don’t know if the concept (these 4 main areas) can be mainstreamed but at least there is a strategy to focus on. Having identified these areas is as important as challenging, because, with those definitions in place, we need to work on how we can provide the support and training required for the institutions to be able to deliver on those areas: how the bank needs to operate to manage environmental and social risks, offer products and services that embrace the climate risks and opportunities, and how this is reflected internally in their own treatment with stakeholders and the creation of policies and procedures.
One of the main challenges I have identified through my dissertation’s survey, is that there is a lot of room for improvement in strategic commitment in the banking sector in Latin America. One of the most recent topics covered at CISL is “Culture and employment practices”, which reflects upon organizational culture for sustainable success. So revealing to me! This is key to understand and increase strategic commitment within the banking sector. How can I help translating this into actions? Sustainable finance is indeed about financial performance, greater growth, lower risks, the business case, and about strategy. But here is a new concept to me: culture, top-down and bottom-up approaches, from an individual employee to a manager and CEO to really get a sustainable outcome .
As Nadine Exter states in her paper: “Culture eats strategy for lunch”, and I am now very much aware of the need to understand, support and work in sustainable organizational culture. My journey has been challenging and it doesn’t stop here, on the contrary it has just begun. I would like now to direct my efforts into understanding and potentially defining tools to help create that culture from within and support the delivery of the sustainable purpose of the financial institutions.
I want to keep doing everything I can and working my hardest to keep moving climate finance forward. The environment provided by CISL is inspirational, and so too does the experience shared by each member of this Cohort. I can’t wait to listen to (and read) my CISL colleagues’ dissertation presentations, all looking very interesting and nurturing for the work I want to pursue. This is what makes us greater, to keep learning from each other, to keep sharing and supporting each other. This is what I value the most about this sustainability journey we have all embarked a couple of years ago. What’s next?