Sustainable finance revolution

The KPMG Global report, "Sustainable finance revolution: How banks can profit from sustainable growth," delves into the pivotal role that banks and financial institutions can play in bridging the funding gap to address climate change while simultaneously becoming bold commercial innovators.

As the Climate Change and Decarbonisation Lead and Global Head of Renewable Energy at KPMG International, Mike Hayes highlights how sustainable and climate finance are emerging as unique and urgent opportunities for banks to transform their decision-making, risk management, and customer products and services through a sustainability-first lens.

Climate-positive impacts

This comprehensive report showcases real-world examples across four essential areas—agriculture, adaptation and resilience, infrastructure, and green retail housing—to demonstrate the breadth of opportunities that generate solid returns for banks while making noticeable climate-positive impacts.

By directing billions of capital towards ventures such as sustainable bonds, sustainable loans, proprietary climate-risk assessment tools, sustainable insurance products, impact investing accounts, and sustainable agriculture financing, banks can address imperative economic, social, and environmental challenges while realising monetary benefits in parallel.

Using existing foundations to gain momentum

Investing in sustainability projects can pose certain risks, including regulatory conditions, reliability of emerging technologies, unpredictable market demand, and geopolitics.

However, leading banks already possess many of the foundations needed to fund these project types in a way that achieves a win-win-win for the planet, their customers, and their shareholders.

These foundations include expert commercial decision-making, sound risk management and governance capabilities, and advanced data and analytical proficiency. Applying these disciplines while embracing sustainable finance as a core business domain will help banks earn solid leadership status and reinvigorate much-needed momentum in the race to net zero.

Supporting customers

The report also emphasises the importance of a holistic economic transition, calling for a sophisticated approach with financiers who can support their customers at every stage of the decarbonisation journey.

This includes more advanced credit-decisioning and risk-pricing capabilities, as well as innovative products and ecosystem solutions alongside robust, transparent, and consistent performance assessment metrics.

How KPMG can help

KPMG professionals bring industry-specific experience and knowledge to support the banking industry in becoming more innovative and fiscally fluid. Together, we can help accelerate climate action and close the funding gap.

The time to act is now, and the opportunities are vast. By integrating sustainability into all parts of the value chain, banks can play a pivotal role in driving the transition to a net-zero economy, help secure a sustainable future for all, and realise tangible economic benefits.