Sustainability Rating As Internal Challenge for the Financial Sector

Abstract

Sustainability rating is rapidly maturing to a level where even the complex concept of sustainable development—including the ecological, sociocultural, and economic pillars and their components, as well as governance aspects such as attitudes—can be objectively described and quantitatively analyzed. This opens the door to reliable benchmarking of financial and other corporations, government authorities at national and municipal level, and the policies and projects they initiate and operate. New key factors, such as city size and typology, that harm or foster the sustainable development of society are becoming visible. The green bonds and their impacts are good examples of the perspectives of the sustainable finance challenge.

Sustainability monitoring practices, new codes of conduct, even a banker’s oath, will be helpful in many cases to raise awareness in the sector, but are not enough to overcome the temptations in all circumstances to act in accordance with survival-driven attitudes. Financial sustainability will ultimately depend on the intrinsic motivation of bankers and financial specialists in their different roles in front-office, risk and compliance, and back office functions. How management can foster this culture is the real challenge of a sustainable finance sector which goes beyond adequate sustainability rating.