The transition to a net zero economy is a pressing global challenge that requires substantial capital support from the private sector. Financial institutions have the opportunity to play a pivotal role in this transition and achieve substantial gains. By adopting a sustainability-first approach, they can mitigate risks associated with climate change and tap into lucrative markets that prioritize environmental responsibility.
The potential for economic growth through sustainable investments is immense, and the time to act is now.
Learn more about how the banking industry can position themselves for the future in Sustainable finance revolution: how banks can profit from sustainable growth.
Sustainable finance revolution
Key themes
- Urgent need for climate finance:
There is a critical requirement for substantial capital to facilitate the transition to a zero-carbon future. Some experts believe three times the current global spending is necessary to meet Paris Agreement commitments.
- Role of banks in sustainable finance:
The financial services sector is witnessing a surge in demand for sustainable finance solutions, presenting banks with the opportunity to lead in decarbonization initiatives while managing risks and stakeholder expectations to achieve net zero goals.
- Investment opportunities across sectors:
KPMG has identified four essential areas of sustainable finance that present examples of how banks can crystallize their sustainability lens: agriculture, adaptation, infrastructure and retail housing. Real word examples demonstrating the breadth of opportunities of investment with convincing returns and discernible climate-positive impacts are presented.
- Building a sustainable financial
ecosystem:
A successful economic transition requires banks to integrate sustainability throughout their value chain, utilizing advanced credit-decisioning, risk pricing capabilities, and innovative products to effectively support customers in their decarbonization efforts amidst the complexities of transition finance.
Key areas of opportunity
KPMG has identified four essential areas of sustainable finance that present examples of how banks can crystallize their sustainability lens. These have been identified based on their climate impacts, the importance within bank balance sheets and the difference they make to banks' customers and stakeholders.
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