IFC and the Financial Times recently announced the winners of the third annual FT Sustainable Banking Awards, the leading global awards for financial institutions that have shown leadership and innovation in integrating social, environmental, and corporate governance considerations into their operations.
A Growing Phenomenon
IFC and FT launched the awards to recognize the increasing consideration of sustainability issues by financial institutions. The competition has grown in popularity, particularly with banks from emerging markets, including Africa. The winners were selected from a record 182 entries from 129 institutions across 54 countries. Two new categories—Banking at the Bottom of the Pyramid and Sustainable Investor of the Year—were introduced and open to nonbanking financial institutions.
2008 Winners
The judging panel, which included leading figures in sustainable finance and development, named Brazil's Banco Real the Sustainable Bank of the Year. The bank also took the overall Emerging Markets prize.
The judges commended the bank for having "embedded sustainability in its DNA." They acknowledged Banco Real's radical vision for sustainability in Latin America: it believes a bank is only as sound as the society that surrounds it. The Brazilian bank has pioneered sustainable banking in South America, putting social and environmental issues at the center of all its business activities and involving its 32,000 staff in the strategy.
IFC/FT Sustainable Banking Awards – 2008 Winners |
Sustainable Bank of the Year |
Winner: Banco Real, Brazil
Runner-up: Rabobank, Netherlands
|
Sustainable Emerging Markets Bank of the Year
| Winner: Banco Real, Brazil
|
| Regional Sustainable Emerging Markets Banks of the Year | Winner: Asia – YES Bank, India
Winner: Eastern Europe – Industrial Development Bank of Turkey (TSKB)
Winner: Latin America – Banco Real, Brazil
Winner: Middle East & Africa – Nedbank, South Africa
|
| Sustainable Deal of the Year | Winners: BlueOrchard Finance, Switzerland, and Morgan Stanley, U.S.
Runner-up: Glitnir Bank, Iceland
|
| Banking at the Bottom of the Pyramid | Winner: ASA, Bangladesh
Runner-up: Wizzit, South Africa
|
| Sustainable Investor of the Year | Winner: E+CO, U.S.
Runner-up: SAM Sustainable Asset Management, Switzerland
|
Lionel Barber, FT Editor, said, "The winners of the FT Sustainable Banking Awards are leading the way in meeting combined social, environmental, and financial goals. With financial institutions around the world reassessing risk and opportunity under increasingly challenging circumstances, we hope these awards will continue to encourage more transparent and sustainable practices in lending, financing, and investing."
Opportunities in Sustainable Banking
There is a growing set of opportunities for banks to develop innovative products in new areas related to sustainability. These include:
- Renewable energy
- Energy efficiency
- Cleaner production processes and technologies
- Biodiversity conservation
- Microfinance
- Financial services targeted to women
- Low-income housing
Business models that address these dimensions are yielding new clients and markets. In the past, most banks approached sustainability as a way of avoiding exposure to controversy and reducing reputational risks. Today, a large majority of them seem to understand sustainability as a source of competitive advantage and opportunities.
According to Lars Thunell, IFC Executive Vice President and CEO, "There is evidence that sustainable banking practices are now mainstream, even in emerging markets." Sustainable banking is increasingly perceived as a solution that can bring sizable business benefits and help banks from emerging markets differentiate themselves from their competition. Thunell affirmed that the awards demonstrate that the business case for sustainable banking remains strong, despite the current economic environment.
Banks can also strengthen their portfolios by systematically evaluating environmental and social risks in the loan or investment appraisal process. Doing so can help protect their asset portfolio by decreasing nonperforming loans, thereby improving financial stability and protecting the bank's reputation.
Overall, sustainable finance offers the financial sector an opportunity to sustain growth and profits by opening up new markets that will serve poor people and value natural resources.
"Sustainable banking should not be confused with charity. What we are doing is business, offering win-win solutions that financially include new people."
—Marc Angius, from Barclays Bank
|
Focusing on the Bottom of the Pyramid
This year's awards reflected a growing focus on microfinance and other products targeting the people at the base of the economic pyramid, particularly in emerging markets. Financial services tailored to the needs of these 4 billion consumers, mostly from rural markets, can have significant development impact by stimulating entrepreneurship and creating new opportunities.
Banks like ASA in Bangladesh have realized the need to develop new business models that benefit this market. This includes funding small-scale farming projects through microcredit, helping fight poverty in the country.
For more information contact:
Lucie Giraud
Communications Officer
Phone: (202) 458-4662
E-mail: Lgiraud@ifc.org
Published on June 13, 2008
