Banking on impact - The Bank's Chief Risk Officer
For our second edition of Banking on Impact, John, the Chief Risk Officer of a large international bank, reflects on the consequences of enhanced scrutiny on their clients' alignment with the bank's sustainability and sector policies.
Read the comic strip and full story below!
How to measure clients’ alignment with your bank’s sustainability and sector policies?
Alongside its FY results, SIB (Super International Bank) issued an updated version of its Group sustainability and sector policies. Further, for increased transparency and commitment toward its stakeholders, these policies were made publicly available on the Group’s website.
John, the bank’s Chief Risk Officer, supported the initiative, however noting it would require enhanced scrutiny on businesses’ alignment to such policies. Reflecting on the consequences this would have for the business, John thought:
- Group Credit had been reviewing sustainability and sector policy alignment within global annual credit reviews and would continue to do so;
- Policies/strategies and client operations evolve continuously, causing alignment review to be increasingly time-consuming and challenging;
- The bank’s decision to make these policies public would further commit the Group to such, thus increasing SIB’s reputational risk;
- Policy alignment measurement would therefore ideally require some form of automated standardized process and /or third-party input.
Following discussions with impak, the bank’s independent impact rating and intelligence supplier, the following was agreed upon:
- impak will continue to provide impact data assessments and scorings for each of the bank’s (listed and unlisted) global banking clients;
- Fit-for-purpose sectorial filters enabling the monitoring of the alignment / the convergence (or not) of SIB’s clients (both at group and subsidiary levels) to the bank’s revised sustainability and sectorial policies and commitments will be added up-front;
- Data on each client will not only be made available on impak’s dedicated platform (impak Analytics) but also directly interconnected to SIB’s IT systems through APIs, enabling augmented interface functionalities and real-time communication.
impak’s solutions go beyond ESG and can be customized when required!