May 24, 2019
Forget the black and red, it’s time for Financial Services to go greenContact
From protesters blocking the London Stock Exchange, to climbing on top of a DLR train at Canary Wharf and stopping traffic in the City of London, some of the most visceral images of this spring’s climate protests were linked to financial institutions.
With well-known banks and financial institutions among the preferred targets for the Extinction Rebellion activists, they were sending a clear message: financial services is seen as one of the main culprits of the climate change crisis. Activists were determined in urging the financial industry to admit the “corrosive impacts of the financial sector on the world we live in”.
It isn’t just activists calling for change either. From within, The Network for Greening the Financial System (NGFS), which includes the Bank of England and the World Bank, recently urged the financial sector to become “greener”, and to help make the global economy more resistant to environment-related risks.
Whilst PR is not the silver bullet (far from it, as actions always speak louder than words), it’s clear financial institutions need to redress what is seen as one of the defining challenges of the century. Shortly, “go green or go home” might become the goalpost that gets assigned to financial institutions.
Spotlight on the City
While individual institutions that have a bad record when it comes to mitigating against climate change in their financing and operations are unlikely to be let off the hook any time soon, the recent protests have had the remarkable effect of placing “the City”, as an entity in itself, at the core of this debate.
No longer is the spotlight cast over a few culprits with bad records: the call is clearly for the financial industry as a whole, symbolically embodied by “the City”, to step up to the challenge. This is, in essence, the reason for the effectiveness of Extinction Rebellion’s protests: they have managed, through their protests, to utilise the visuals of Fleet Street and the London Stock Exchange to signify a unit, an entity which must, itself, become the driver of change.
Spotlight on the successes
To illustrate the necessary change, financial institutions must better publicise the good they are doing in a much more effective way, whether that is through utilising technology that can allow banks to have an eco-friendly approach, or through sustainable investing.
Whatever your opinions on the recent protests or on the underlying issues, it is clear that the financial services industry cannot escape criticism by remaining silent: it must become a champion both for change and for the work it is already doing.
For example, Citi Bank needs to make more of how it lit Detroit with energy efficient bulbs, saving on energy and cutting crime. We need more Cleantech incubators, like the enormously successful one that Wells Fargo set up.
Importantly for the City of London however, we need to see more proactivity from the UK when it comes to such initiatives. While it is undeniably good to see the working groups set up by the Bank of England and the FCA to deal with the risks posed by climate change, it is important that this transcends boardroom conversations. Otherwise, the UK risks being seen as all-talk and no action when it comes to the role it plays on the global financial stage.
Given the rate of the criticism, this must be done quickly. It also means financial services firms must be telling these stories in a much more savvy way.
Firms must align their messaging, i.e. what they purport to stand for, with the initiatives they are actually undertaking. A simple section on a website which highlights a firm’s commitment to sustainable investing is not enough unless it is followed up with tangible initiatives. Campaigns that raise awareness, and firms that are out there enacting change will be the ones that can successfully navigate the intensifying scrutiny.
The City can, and must, do better in promoting the not insignificant good work that it is doing. Initiatives such as The City of London’s Green Finance Initiative cannot go unpublicised anymore.
This is where good Financial Services PR comes in. If the UK is to take its place as a global centre for green finance, it cannot afford to be quiet about its initiatives.
Proactive, not reactive, communications is what is required from the financial sector. Firms that take a defensive stance and justify their green initiatives, or lack of, only when under scrutiny are going to be much less likely to be successful in aligning themselves with the growing ecologically responsible movement.
Keeping your head down and hoping that you go unnoticed is no longer a winning strategy: the financial services industry must become bolder both in its efforts, and in its advertising.