Deloitte and IIF Report: Financial Sector’s Sustainability Surge
Overview
A recent report by Deloitte and the Institute of International Finance (IIF) reveals that 45% of financial firms now have a Chief Sustainability Officer (CSO), a significant increase from 15% in 2020. This shift underscores the growing importance of sustainability in the financial sector, though challenges in risk assessment and data quality remain.
The Rise of the Chief Sustainability Officer
The financial sector is increasingly recognizing the importance of sustainability, as evidenced by the tripling of firms appointing Chief Sustainability Officers (CSOs) from 15% in 2020 to 45% in 2025. This trend highlights the sector's commitment to integrating sustainability into corporate strategy and governance.
Driving Net-Zero Commitments
Financial firms are at the forefront of the global push towards net-zero emissions. Those making net-zero pledges are seeing greater integration of sustainability in their operations, higher levels of product innovation, and faster progress in sourcing ESG data. As one executive noted, "Net-zero is no longer a nice to have—it’s a must-have."
Governance and Execution Challenges
Despite the progress, financial institutions face significant challenges in executing their net-zero commitments. Only 3% of firms feel confident in their ability to assess climate risks for individual customers, and while 80% have sourced Scope 1 and 2 emissions data, Scope 3 data remains a major hurdle. Effective governance structures and comprehensive data are crucial for meeting these ambitious goals.
Innovation in Finance
In response to net-zero demands, financial institutions are developing new products and services. Approximately 25% of firms have launched net-zero products targeting industries such as energy, real estate, and transportation. Additionally, banks are forming ESG advisory teams to assist clients in transition finance, covering areas like hydrogen and carbon capture.
The appointment of CSOs and the push for net-zero commitments reflect the financial sector's evolving role in global sustainability efforts. While significant strides have been made, ongoing challenges in risk assessment and data quality must be addressed to fully realize these ambitions. The journey towards a sustainable future is complex, but the financial sector's proactive steps are paving the way for meaningful change.
Read the full report here:
https://esgnews.com/wp-content/uploads/2025/02/gx-IIFPOV-2.pdf
