Beruflich Dokumente
Kultur Dokumente
Contents
1. Precursor
Sustainable Finance Social Banking
2. Post Crisis emergence of social banking for sustainable finance 3. Social Banks, Products and Services 4. Social Banking and sustainable finance in the Indian Context 5. Challenges for social banks as agents for financial sustainability 6. Future for sustainable finance 7. References
Sustainable Finance
1980 1996 1997 2006
Introduction of CERCLA and Superfund Environmental, sustainable, or socially responsible investment products and services began to penetrate the market Kyoto Protocol
Historical overview
Sustainable finance is about using money to encourage socially responsible business and to create a sustainable society Ethical banking institutions focusing on sustainable finance Co-operative banks and credit unions Social banks Microfinance institutions Sustainable banking options Savings options: Deposit accounts, bonds Investment options: SRI funds, sector-specific listed funds, microfinance funds, fair trade funds, social venture capital funds, individual ethical businesses
Social Banking
Sustainability
Bank with a conscience Triple Bottom line
Social banks define themselves as Bank with a conscience Focus investing in community, opportunities to disadvantaged, supporting social, environmental & ethical agendas
Greater good instead of private profit just for a few.
Mainstream banks are focused solely on profit maximization. Social Banking implements triple principle of profitpeople-planet
Crisis
European banks emerged big winners of the crisis Grew more than 20% per year Assets doubled in the period (2007-2010)
Increased conviction of bank customers on social bank Perceived to be less speculative and more responsible , ethical and community oriented to deal with money
Social Banks
Combined assets of European social banks sits at 10.5 billion Euros
Expected growth rate for European social banks 13-15% compared to an expected growth rate for European main stream banks 1-3%
German Gemeinschaft fr Leihen und Schenken (GLS) Bank ($2.2 billion), the Dutch Triodos Bank ($6.7 billion), the Italian Banca Etica ($0.8 billion), the Swiss ABS bank ($0.7 billion) and the Danish Merkur Bank ($0.2 billion)
A very sluggish response compared to the multitude of international initiatives underway Barriers to adopting sustainability
Risk of failure Loss of business to peers Lack of RBI mandates Lack of policies required to altering the present systems
Challenges
Competition from conventional banks which are promising sustainability, at least for marketing purpose
Recommendations
Social banks need to be innovative in use of technology to woo the younger generation RBI needs to formulate policy guidelines for adoption of sustainability practices Establishment of an agency to promote awareness of and look at skill development of bank workforce through workshops and courses
References
Dr Ronald Benedikter, European Answers to Financial crisis: Social Banking and social Finance, Spice Digest, Spring 2011. Available from: http://spice.stanford.edu Session Keynote Address delivered by Dr. K. C. Chakrabarty, Deputy Governor, Reserve Bank of India at the 2nd FTYES Bank International Banking Summit at Mumbai on October 15, 2012. Olaf Weber & Sven Remer, Social Banks and Future of Sustainable Finance, The World Financial review. Available form: http://www.worldfinancialreview.com/?p=441 Weber, O., & Remer, S. (Eds.). (2011). Social Banks and the Future of Sustainable Finance. London: Routledge Porter, M. E., & Kramer, M. R. (2011). Creating Shared Value. Harvard Business Review, 89(1/2), 62-77 Olaf Weber, Social Banks and the Future (and Past) of sustainable finance. Available from: http://socialfinance.ca/blog/post/social-banks-and-thefuture-and-past-of-sustainable-finance