Colin Hunt (pictured), President of IOB and CEO of AIB, outlines how the financial services sector is addressing the climate crisis

Climate change is the real and immediate global emergency facing humanity. Extreme weather events - floods, wildfires, storms and droughts – are wreaking personal and economic devastation on communities across our planet.

Mitigating the impact of the climate crisis requires global action and extensive investment at political, business and personal level if we are to ensure the survival of a viable Earth.

Time is not on our side. Ireland now has fewer than eight years to achieve the government’s target of reducing greenhouse gas emissions by 51% by the end of 2030 – setting us on a path to reach net zero emissions by no later than 2050.

Given that the IMF has estimated the investment required to finance Ireland’s transition to a low-carbon economy is about €20 billion per annum, much of which will come from the private sector, banks have a crucial role to play.

In Association with

To progress towards a low-carbon economy, the financial services sector must take a leadership role in backing green innovation, funding sustainable businesses and devising products and services – such as discounted green mortgages to purchase energy efficient homes – all of which help support customers to reduce their carbon emissions.

Green trends

The good news is that our sector is already making progress. The rise of Environmental, Social and Governance (ESG) investing, green bonds and green lending are all encouraging signs of a shift towards sustainability.

At AIB, we are doubling our Climate Action Fund to €10 billion. We will now achieve double our original green lending target by 2023, recognising both customer demand and the need to do more to be radical in the combat against climate change.

AIB’s ambition is that green or transition lending will account for 70% of overall new lending by 2030 – significantly assisting the Government and European Union in meeting their carbon reduction targets.

Education is key

Ireland’s first Sustainable Finance Roadmap was launched last October. This ambitious framework will drive progress on Ireland’s climate goals and establish this country as a centre of excellence for sustainable finance. A key priority is the acceleration of financial workforce skills and training.

Nelson Mandela said that education is the most powerful weapon in changing the world. I could not agree more. Training and developing our people in the critical area of climate finance will be key to successfully delivering the banking sector’s sustainability agenda.

As President of IOB (The Institute of Banking) since March 2021, I have worked to prioritise sustainability. And, as the industry’s learning partner, IOB launched its Responsible and Sustainable Finance programme in 2020.

In addition to embedding ESG principles across all existing programmes, IOB will this year expand its offering with new courses on sustainability topics such as risk management, SustainTech, climate change, biodiversity, non-financial disclosures and sustainability reporting.

Keep pace with change

Over the last decade, our sector has experienced rapid transformation through technology advancements, market disruption and changing customer preferences.

Keeping pace with rapidly evolving guidance, regulation and industry best practices in sustainability can be a challenge. But I am confident that with the recent introduction of IOB Learn, a personalised learning platform that allows IOB members to access a library of on-demand content and webinars, financial services professionals will have the tools they require to rise to the climate finance learning challenge.

Visit IOB.ie to become a member and benefit from exclusive industry insights, events, workshops and access to over 40 UCD accredited programmes.

Pic: Shane O'Neill