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Green finance: the path to a sustainable future for banking

October 2021

The subject of green finance has come to prominence on a global stage and become a huge talking point in the investment banking world, even more so since the COVID19 pandemic began. Today, as climate change climbs the ranks in both the political and news agendas, there is a huge rising demand for ‘responsible’ investment products and practices.

Governments have also increasingly appealed to the banking and investment industry to show leadership in the economic and societal journey to a more environmentally friendly future.

Competition in the investment world is also rising fast with Fund Managers rallying to showcase their green credentials to appeal to a new investment audience just beginning on their investment journey. They have been working at pace to develop sustainable approaches that put ESG at the heart of their working practice in order to tailor their investments to their values.

As green issues continue to grab headlines and governments look towards sustainable solutions for the future, our industry has a unique opportunity to highlight ways to achieve a sustainable banking future. However, as sustainability grows in popularity within the private and banking industry, another key consideration is the opportunity we have as an industry to build understanding of meaningful approaches and actions that are capable of effecting lasting and sustainable change.

Green issues have never been more pressing. The climate crisis has taken the world by storm in recent years and, in response, governments have placed even greater importance on the UN’s Sustainable Development Goals. The European Union, for instance, initiated The European Green Deal, which aims to transform the 27-country bloc from a high-to-low carbon economy and achieve climate neutrality by 2050.

In order to meet these ambitious targets, governments must rely on the banking and investment industry to help allocate capital to new technologies and businesses that place sustainability at the heart of their initiatives. Green financing which increases the level of financial flow from the public, private and not-for-profit sectors to sustainable development priorities will play a critical role in achieving green goals. Banks that place green finance at the forefront of their strategic planning will be the leaders in fostering a sustainable carbon economy and building more balanced and inclusive societies.

Santander: the most sustainable bank in the world

As the most sustainable bank in the world, Santander CIB is a driver in global transformation towards climate neutrality. Our strategy takes into account the social and environmental risks and opportunities in our operations, and actively contributes to a more balanced and inclusive economic and social system.

Thanks to our longstanding commitment to Responsible Banking and our emphasis on Environmental, Social, and Governance (ESG) initiatives, we are proud to be ranked as the most sustainable bank in the world by the Dow Jones Sustainability Index (DJSI)- the main international benchmark on company sustainability in regards to environmental, economic and social policies.

We understand that as the globe embarks on a coordinated effort to support urgent environmental needs, it’s the banking sector that must emerge to enable initiatives aiming to mitigate the effects of climate change. That’s why we focus on inclusive and sustainable growth:

  • by meeting all our customers’ needs, helping entrepreneurs start companies and create jobs, strengthening local economies, improving financial empowerment, and supporting people get the education and training they need.
  • by financing renewable energy, supporting smart infrastructure and technology to tackle climate change (such as agrotech and green tech).

€120 billion in green finance by 2025

Santander provides genuine solutions through various financial products and services aligned with the UN´s Sustainable Development Goals that drive tangible change.

As a starting point, Santander has issued two €1 billion green bonds as part of a global sustainable debt plan. The funds will be used to finance and refinance existing renewable projects in wind and solar energy in SCIB´s portfolio, and to fund future projects. This way, we contribute to initiatives that create an immediate impact, while simultaneously stimulating demand in green bonds and promoting a longstanding commitment to future green initiatives.

Additionally, this plan – led by Santander CIB – supports the Group´s responsible banking targets, which include the commitment to provide more than €120 billion in green finance by 2025 and financially empower more than 10 million people.

At Santander CIB, we are advocating for meaningful and longstanding changes, and ensuring that our products and services really create an impact in the battle against climate change.

By adopting sustainable development principles into our strategies, we ensure services and products cater to this generation’s needs and simultaneously preserve future generations’ opportunities.