- What is driving the sustainable finance revolution
- What the next-generation of sustainable finance bankers will look like, and
- What banks need to do to ensure they have the talent required to be successful in this new era.
1. The Sustainable Finance Revolution: Everyone Wins
“The future of banking lies in financing the future.”
Carlos Torres Vila, executive chairman, BBVA
- Asian Infrastructure Investment Bank
- CPP Investment Board
- European Bank for Reconstruction and Development
- Johnson Controls
- Bank of America
- European Investment Bank
- Bank of China
- J.P. Morgan
Nearly $200 billion worth of sustainable bonds were issued globally in 1H 2020
Non-traditional players have been able to establish themselves as market leaders in sustainable finance
|Rank||Company||Volume ($mil)||Mkt. Share (%)||Revenue ($mil)|
|4||Bank of America||$12,084||5.3||$67.3|
“Climate protection must be a priority for us – in the way we extend credit, through the products we offer, the policies we implement.”
Christian Sewing, CEO, Deutsche Bank
BARCLAYS EXPANDS LEADERSHIP IN ESG BANKING (AUG 2020)Barclays announced new additions to its investment bank teams leading environmental, social, and governance-related finance work with clients, with appointments in equity capital markets, debt capital markets, and advisory. “Barclays has clear guidelines and targets in place for our work, to reduce significantly the impact that finance has on climate change. Through these appointments, we are demonstrating our ongoing commitment to ensure that Barclays is at the forefront of the financial services industry’s work around all ESG-related topics,” said Joe McGrath, global head of banking.
CITI CREATES NEW TEAM OF BANKERS FOR ‘FAST-GROWING DEMAND’ IN ESG BONDS (JULY 2020)Citigroup has created a new team of bankers dedicated to generating sustainable bonds as the US investment bank continues its push into environmental and sustainable banking, which it says will surge in the wake of the coronavirus crisis. Senior dealmakers in London, New York and Hong Kong have been shifted into the new team, called global sustainable debt capital markets. Philip Brown, head of Citi’s public sector DCM business, has been handed responsibility for the new unit, which was created in response to fast-growing demand from clients for socially responsible DCM solutions.
CREDIT SUISSE RESTRUCTURES BANKING TEAMS WITH ESG FOCUS (JULY 2020)Credit Suisse unveiled sweeping changes to its structure to reduce costs and prepare the bank for its next chapter under new chief executive Thomas Gottstein. Among the changes, Credit Suisse said it would combine oil, gas, utilities and renewables teams into its energy and infrastructure group. The group will be led jointly by Jonathon Kaufman and Tom Greenberg. The bank also unveiled the creation of a new ESG advisory unit, led solely by Tom Greenberg, which will help new and existing clients look at their ESG issues and advise on sustainable growth and finance opportunities.
BANK OF AMERICA ESTABLISHES SUSTAINABLE MARKETS COMMITTEE (JANUARY 2020)To accelerate Bank of America’s progress, identify new opportunities and build on the company’s sustainable finance efforts, the company established a sustainable markets committee in January 2020, co-chaired by Vice Chairman Anne Finucane and Chief Operating Officer Tom Montag. The committee has renewed the bank’s focus on developing sustainable finance – including policies, research, capital, and investment products. As part of this effort, Karen Fang entered a new role as head of sustainable finance. In this role, she works across lines of business to support the initiatives of the Committee.
2. Implications on Talent: The Rise of Next-Gen Sustainable Bankers
- Narrow industry expertise
- Regional focus
- Lockstep/linear career progression (e.g., from analyst, MBA, associate, to banker)
- Reactive approach to client inquiry
- Product orientation (sells what the bank has to offer)
NEXT-GEN SUSTAINABLE BANKER
- Global citizen/global perspective
- Has lived and worked on multiple continents
- Creative career progression (e.g., from analyst, MPA/MPP/MBA in sustainable finance, NGO, to sustainable finance)
- Solutions-oriented approach as a trusted advisor
- Transformational orientation (agile/entrepreneurial/innovative)
“Today, all bankers are sustainability bankers.”
Dan Cozine, deputy head, global credit markets Americas, BNP Paribas September 2020
Next-Generation Sustainable Banker Archetypes
CORPORATE & INVESTMENT BANKERSExperience could include commodities finance, broader energy, power, and natural resources banking, project finance
DCM PROFESSIONALSThe most plug-and-play source of talent, primarily residing within smaller European banks and delivering a sustainability domain expertise combined with a capital markets acumen
INVESTORS / ASSET OWNERSExperience on the buy side evaluating energy, power, and/or renewable investments
ENERGY, CORPORATE, OR NGO LEADERS
SUSTAINABILITY CONSULTANTS, RESEARCHERS, AND RATINGS EXPERTSExperience at third party research or consulting firms focusing on ESG performance, metrics, and strategies (e.g. Sustainalytics)
3. Embedding Sustainable Finance into Your Organization and Leadership Culture
SELECTIONSeek talent from banks and geographies that are more advanced in sustainable finance, and apply next-gen sustainable banker archetypes when selecting senior leaders
SUCCESSIONEmbed conversations about sustainability and sustainable finance into your succession management framework and succession planning
REWARDIntegrate sustainability into the objectives, incentives and remuneration of sustainable finance leaders, as well as board members and C-suite
DEVELOPMENTMake sustainability and sustainable finance a core focus of leadership development and crucible experience
As the world deals with the simultaneous global crises of COVID-19, racial injustice, and climate change, sustainable finance will be crucial to fund the major global public and private initiatives that will be required over the coming years. As such, we expect the sustainability transformation to unfold in a similar fashion to the digital transformation which has occurred over the past decade.
“Every business has a responsibility to tackle today’s global challenges. At Santander we’ve worked together to deliver profit with purpose – ensuring that our day-to-day operations help more people and businesses prosper in a sustainable way.”
Ana Botín, executive chairman, Santander
The first phase will be a race for talent - the sustainability revolution will require a new breed of finance leaders to deliver cutting edge sustainable solutions. These leaders will combine subject matter expertise (e.g. in carbon emissions, public health, etc.) with a global perspective and an entrepreneurial mindset that will allow them to engage across multiple stakeholders. These types of leaders are in high demand but short supply, and most companies will simultaneously be looking to develop capabilities in-house in addition to seeking the best external talent.
“We remain laser focused on incorporating sustainability principles into everything we do to help ensure business success, improve our operations and contribute to a strong global economy. Our clients, colleagues and stakeholders expect no less.”
Michael Corbat, CEO, Citi
The second phase will be embedding sustainability throughout the organization. This will be accomplished by demonstrating both internally and externally the commercial imperative of embracing sustainability. Clients, investors and employees are all demanding a clear articulation of how sustainability is integrated into the culture and corporate strategy of an organization. Failure to do so will result in lost business, investor pressure, and the inability to attract and retain best-in-class talent.