Powering sustainability in financial services

A decade ago, energy did not typically feature on the boardroom agendas of many financial services businesses. Today, however, leadership teams are challenged by rising and volatile energy costs, the need to decarbonise, managing bills and payments for complex and evolving estates, and wide-ranging regulatory change.

The financial services sector’s pivotal role in controlling capital flows across all industries puts it in a unique position: it holds the key to unlocking systemic decarbonisation across the global economy, by choosing how it finances emissions.

Achieving transformational change across the entire financial system is a huge undertaking. Nevertheless, there are many ways that companies can achieve change in the short to medium term. Yet what strategies can financial services firms implement to decarbonise their physical estates?

While the financial services sector is not considered to be energy intensive, its scale, the prevalence of large numbers of sites in retail banking, and the increasing use of online technologies mean that – for a service industry – it consumes a lot of energy. Given the sector dynamics, accurately measuring and reporting emissions is an increasingly complex task, particularly for businesses that operate globally.

This is especially true given that regulatory requirements to report greenhouse gas (GHG) emissions vary between jurisdictions. Larger firms and businesses operating in energy-intensive industries are often subject to mandatory GHG and environmental reporting, whereas smaller companies operating across all sectors are choosing to report voluntarily in response to pressure from stakeholders.

Those involved in energy decisions typically include specialists in energy management, operations and contracts, procurement, finance and emissions reporting. Global organisations may replicate these positions in each region. Each of these specialists have different perspectives, goals and needs. And with multiple teams involved, it can be difficult to identify and act on a single source of truth.

Furthermore, those involved in using energy data are not necessarily energy specialists. What they value is having simplified but accurate reporting that provides key insights, derived from raw data, so that they can make informed decisions.

With a comprehensive energy strategy, financial services firms can reduce their carbon emissions, maintain resilience, predict future energy costs, and enhance their environmental, social and governance performance. An effective strategy includes optimised energy usage, planning and implementing a procurement strategy, and exploring ways to cooperate with energy companies and grid operators – for example through energy flexibility.

For most financial services organisations, however, sustainable energy is not in itself a core business competence. Implementing an energy strategy that addresses all of these priorities takes knowledge and expertise, and a current understanding of regulatory and compliance issues.