How Does Sustainable Banking Add Up?
Catalyst Australia, Sydney, 2015
32 Pages Posted: 10 Mar 2016
Date Written: July 1, 2015
The big four Australian banks have received international accolades for their sustainability efforts. At the 2014 World Economic Forum, Westpac was named the most sustainable company in the world, with former chief Gail Kelly being "[…] delighted that Westpac's sustainability performance has been rated so highly on the global stage." ANZ was named as the global banking sector leader in the Dow Jones Sustainability Index, a major reference point for sustainable investors, six times in the last seven years, while NAB and the Commonwealth Bank have likewise been recognised for their sustainability performance. Despite these accolades, a number of recent controversies have stimulated public debate about the social and environmental responsibilities of the banking industry. Australian banks have suffered public outrage as a result of dubious financial advice costing thousands their life savings, disputed credit card fees, rate-fixing, and insider trading, as well as the funding of unsustainable activities such as coal mining and infrastructure projects along the great barrier reef, nuclear arms manufacturing, and land grabs in emerging economies. As a result, confidence in banks is low: according to a national survey performed by the Australia Institute, 76% of respondents believe that banks put profits before their social and environmental responsibilities. How can these two conflicting pictures of the banking sector be explained?
Keywords: sustainable banking, corporate social responsibility
JEL Classification: M14
Suggested Citation: Suggested Citation