The financial services industry is experiencing rapid change across the entire value chain of the business. External and internal challenges are making the business more difficult, burdensome, and uncertain. The ever changing economic environment is pushing banks to adapt to external pressures and disruptions regularly, one of which is sustainable financing.
Sustainable finance represents a significant opportunity for financial institutions to reposition their business model in line with the customer expectations, evolving economic risks & challenges, and recent ESG and sustainability aligned requirements & standards driven by politics and society.
Green finance on the other hand involves the redirection of financial resources towards environmentally sustainable projects and investments. It is a great instrument that facilitates the transition to a low-carbon economy and which works towards achieving global goals.
To meet the rising ESG regulations, stakeholders' expectations and awareness of changing market dynamics, financial institutions should integrate the transition throughout their business model. This means that the organisational structure, processes, ways of working, data systems, technology, and culture will be impacted.
Global commitments within the industry also require actions and accountability - the UN Principles for Responsible Investment (PRI), UN Sustainable Development Goals (UN SDGs), United Nations Global Compact (UNGC), United Nations Environment Programme Finance Initiative (UNEPFI) Principles for Responsible Banking, Equator Principles, UNEPFI Principles for Sustainable Insurance, Equator Principles, Green Bond Principles etc.
In Nigeria, the Central Bank of Nigeria (CBN), the Nigerian Exchange (NGX), and the Securities and Exchange Commission (SEC) are driving the adoption of sustainable finance and sustainable business across the finance and capital market.
Leveraging internal and external capabilities to pursue long-term growth and transition will enable compliance and establishment of a strategic position in the sustainable marketplace thereby leading to business growth.
With the significance of the impact sustainable finance will have on future business models and its goals to create lasting benefits for both organisations and society, financial institutions must strengthen their ESG strategy and harness the financing opportunities for sustainable development. This will set them apart from the competition and breaking into new lines of business.
At PwC, our expertise covers the entire spectrum of potential issues encountered when implementing regulatory requirements as it relates ESG and sustainable finance. We are confident that you can count on our holistic approach – from developing strategies through to integrating them into everyday routines. We can support you on the following services: