What does ESG mean for banks?
of institutional investors are ready to stop investing in non-ESG products by 2022
Source: PwC’s 2020 ESG survey
of asset managers planned to stop launching these products by the same period
of local banks’ CEOs are willing to invest more in the green transition of the banking sector
With mounting pressure from stakeholders and regulators alike, banks are increasingly realising, now more than ever, the need to pursue the total sustainability transformation of their core businesses. However, the attainment of this transformation is a long process that would require guidance. In this context, we see the following steps as relevant:
Incorporating ESG into the bank’s strategy is not yet the status quo
Organisational structure could facilitate ESG integration
Progress must be quantified by developing KPI’s and non-financial reports
With 128 authorised banks at the end of the financial year 2020, the number of banks rose by one.
In terms of geographical representation in the Luxembourg financial centre, German banks still make up the largest group at 17.2%, followed by Chinese banks and French banks, both with 10.9% and Swiss banks with 10.2%.
In 2020, the balance sheet total increased by EUR 41.6 billion (+5.1%), confirming an upward trend observed since 2017. The COVID-19 pandemic caused an increase of the aggregated balance sheet since investment funds reallocated the funds’ assets in more safe reinvestments. 56% of banks saw a growth of their balance sheet, notably the largest banks of the financial centre as well as the banks active in asset management on behalf of private and institutional customers.
Luxembourg Banking & Capital Markets Leader, PwC Luxembourg
Tel: +352 49 48 48 2451