While FIs can use their collective might to drive more sustainable outcomes through channeling investments, there’s also the need to look more internally at their own operations. There are more tangible things that FIs can do to reduce their own environmental impact. To date, there’s more than 900,000 branches across the world and three million ATMs. This footprint has significant environmental impact and FIs can take steps to improve their processes, technologies and energy use to achieve their own ESG targets.
FIs globally have started to formulate strategies to minimize their emissions as part of transitioning to a low-carbon economy. Hence, energy consumption and carbon neutrality in banking operations are recurring themes in sustainability reports across the industry:
- State Bank of India has installed solar panels across their branches to be a carbon-neutral organization by 2030.
- Barclays aims to reduce its operational energy usage by 70% by 2035, including shifting to renewable energy sources.
- DBS has committed to using 100% renewable energy sources for Singaporean operations by 2030 and ensuring net-zero operational carbon emissions globally. In addition, they prioritize reducing energy consumption through low energy lighting, living office branches and energy-efficient AC.
- Lloyds Banking Group has pledged to reduce its energy consumption by 50% by 2030. In 2020, they installed low- carbon travel infrastructures, such as electric vehicle charging ports and cycling facilities, in 14 of their offices.
Technology can play a key role in supporting the delivery of a sustainable future. The likes of IoT, Big Data, and intelligent assets lay the foundation of resource and energy optimization. For instance, using predictive and remote maintenance enables FIs to extend the lifecycle of an asset by identifying an issue prior to component failure. In addition, it reduces transport and improves efficiency of service engineers and therefore impacts carbon footprint.
Energy usage is an important area of focus for FIs. As they rely on self-service machines, particularly the ATM to fulfil many of customers’ regular transaction needs, looking for ways to reduce power consumption and improve efficiency is key.
ATMs are on constantly providing the ability for people to access cash 24/7. But this always accessible provision means the world’s ATMs emit over 771Mil kg of CO2 in idle mode, costing FIs globally up to $500m. Significant improvement in design over the last few years means that steps have been taken to reduce power consumption.
Meanwhile, the average branch produces around 102,000kg of CO2 emissions annually according to the American Banking Association, so tackling energy consumption, heating and lighting can all help drive a more sustainable industry.
Everyone has a role to play, be it from investments, product design, manufacturing, transport, operations, services, self- service technology and end-of-life, as all areas ultimately impact the sustainable future of the planet and banking, no matter how big or small that may be.