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Real Economy – Real Returns: A Continuing Business Case for Sustainability-focused Banking

The Global Alliance for Banking on Values (GABV), a not-for-profit organisation representing a network of the world’s leading values-based banks, released an updated research report reinforcing the business case for the growing values-based banking movement. The data is clear: making the business case for sustainability-focused banking is compelling. So why aren’t all banks adopting this model?

Since the financial crisis in 2008, a group of sustainability-focused banks (all members of the GABV), have demonstrated that a focus on the real economy with a dedication to supporting economic, social and environmental impact delivers steady financial returns. These banks operate in numerous markets, serve diverse needs, use distinct business models but share a common strategic foundation; the Principles of Sustainable Banking. They are growing because they provide economically viable banking alternatives focused on the needs of society thereby creating a more diverse financial ecosystem.

Marcos Eguiguren, Executive Director of the GABV explains: “Our updated research report shows that the sustainability-focused banks are continuing to deliver stable risk-adjusted financial returns by focusing on the real economy. They are acting as financial intermediaries dedicated to supporting economic, social and environmental impact while remaining strong capital positions. We can find these banking institutions in different markets, all serving diverse needs but they all are using specific business models driven by a set of common guidelines, the Principles of Sustainable Banking. One of the reasons why these banks are growing in size and number is because they are meeting the needs of individuals and enterprises in the local communities.”

The banking ecosystem will be strengthened as a result of the growth of financial institutions operating in accordance with the Principles of Sustainable Banking. Systemic strength and lower risk to depositors and deposit guaranty programs will come from the resilient and positive performance of these banks. These banks deliver shared economic, social and environmental value to multiple stakeholders including society, clients, co-workers and investors.

Then we ask you: why isn’t all banking done this way?

 

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