Why bankers must become eco-warriors

In the first Bristol Distinguished Address Speaker Series of 2020 at the University of the West of England (UWE), Triodos Bank Chief Executive Dr Bevis Watts delivered a lecture on how his bank and the wider sector can help improve the environment and be a driver of change for societal issues across the world.

As the nation’s leading environmentalist bank, Triodos has been leading the UK in trying to improve society and the environment for 25 years. However, with leading business and political figures addressing the impact we have had on the environment, Watts’ speech was a timely reminder of the damage done and what can be changed to improve the situation.

Despite the sensationalism around the environmental issue – and the polarising figures within it like Extinction Rebellion, Donald Trump and Greta Thunberg – Watts was optimistic the banking sector can be a beacon for a brighter future.

A breakthrough year

He opened his lecture by highlighting the past year within climate change activism: “2019 was an incredible and breakthrough year for the climate and environmental situation. There is now an urgency and action for change.”

Triodos and many other leading businesses sided with Extinction Rebellion in April last year, highlighting the need for immediate action – and despite the mixed reaction the environmental group provoked, the reality of not addressing the major climate issue around the world would be a lot worse.

Watts highlighted how banks now had to stand up to the reality and be a driving force behind the message for a greener and environmentally-friendly future.

He said: “Banks have to be key to that action, and it is actually within their interest to do so. We all have a role to play, but banking will be central to any successful change relating to the environment.

“We inherently think that banking is not something that is ‘good’ for the natural environment, but that is changing.”

Triodos and how banking is changing

Triodos has been a leading advocate of environmental and societal awareness within the business community for more than 40 years. The bank operates in six European countries with around €17bn in assets under management and more than 700,000 customers – and is growing rapidly.

The founders of the bank set out not to be the biggest, but to show that banking could be done in a more positive way – by helping the environment and tackling societal challenges, as well as satisfying shareholders. The bank is transparent with all business loans and makes them easy to challenge if they are not meeting public scrutiny. There is a shareholding trust that makes sure the goals and missions set out by the company are met, and that Triodos practices exactly what it preaches regarding making true change.

In a world where business is waking up to the effects it has on the environment, Triodos has been adapting the current banking model for decades – highlighting that change is possible, and it will take a sector-wide movement to change the world.

However, Watts knows the sector, and his own bank have a long way to go to drive change. He said: “We are not naïve – we know we are a very small player in an enormous global market. So, our challenge is to be that reference point, and drive change and influence thinking on how to do banking in the modern age.”

Does nature have the answer?

If environmental and societal change is needed – what can banks do? And how can that change be implemented?

Throughout his lecture, Watts used five different animals he had captured on camera as metaphors for what is currently happening within banking, and what is likely to happen in the future.

The first animal: an elephant seal. This represents how the banking sector has acted over the past 40 years. Female elephant seals are ready to have pups very soon after giving birth. This leads to bulls – often five times the size of the females – crushing newborns on the way to their next conquest. The implication being that banking has not been aware of the wider impact of its decisions, despite the success it has had. Very little thought has been given to smaller businesses and their impact on the economy.

These days for banking are disappearing, as the sector has gone through extensive change, and social conscience and environmental awareness are becoming increasingly prominent in mission statements. The scandals within banking have led to change, and although there is a long way to go – it is clear to see that banks are no longer acting like these animals.

The second animal: a seahorse. This represents the complete role reversal Watts would like to see within the banking sector. In the world of this animal, the male gives birth – completely opposite to all other species. Banks play a key role in society – they are the intermediaries for many facets of everyday life. Over the years, many challenges have faced traditional banking – fintech, challenger banks, etc – but they all end up under the ‘bank’ umbrella. This is all well-regulated and robust.

A bank’s role is to keep money safe, however, it is also there to use its money in the best interests of its customers and wider society. That is where the shift is needed – a move away from being self-serving and going against traditional banking and focusing on “value-generation” and realising the role that banks can have in creating positive change for all.

The third animal: an elephant. When an elephant pushes over a tree to reach the fruit, it uses all of its force, but stops before ripping the tree out of the ground or destroying it – so that it still lives and can keep on producing fruit. This is how banking needs to change. Banks will still need to succeed, but long-term planning for continued success is needed. This means understanding societal and environmental factors. The global banking sector is integral to all walks of life and every industry. Gaining a full understanding of their impact – beyond pure financial gain – is where, in Watts’ opinion, the future of banking will be.

Watts’ fourth animal is an arrow crab. Within his image, the crab is eating a fireworm. If a human were to touch one, it would give them a rash for a few days. This is a metaphor for the changes banking regulators will need to go through, for opinions and investments into green energy and ethical businesses to become more-widely accepted. There will be some painful consequences – but the long-term success of the bank and wider world will be worth it. Banks need to be regulated to have a more responsible role for the environment, and those changes need to happen now.

The fifth animal: an octopus – a metaphor for how we act as banking consumers (both private and business). During the day, an octopus is curled up and hidden. This is exactly how the average consumer views their bank and money – happy to accept what it is and not question anything. In Watts’ view we need to change as consumers, and not just expect the banks to evolve into being more socially and environmentally aware.

The octopus at night is a very different creature. It uses its tentacles to find food in every space possible – in Watts’ opinion, this is what the modern banking consumer needs to become. Find all the information they can about the bank, even if it is hard to get. This makes banks more accountable for their decisions. It is important for the future of banking to make it socially unacceptable for the consumer to be unaware of the ongoings at their bank regarding where their money is being spent.

Watts’ final animals were the starlings on Shapwick Heath in nearby Somerset. Across the country, the birds are in decline – however in this location they are thriving. This shows that with dedicated effort and environmental change, banking can also recover and thrive in the new age of the eco-warrior bank.

To listen to Dr Watts’ full lecture, where he also talks about the connection between banking and the environment, why sustainable banks are achieving better result than other institutions, banking’s relationship with the fossil fuel industry, the important role of Mark Carney and many other topics, listen to the podcast here.

UWE’s Bristol Distinguished Address Speaker Series has four remaining lectures for the 2019-20 season, and details on them can be found here. Business Leader will be publishing articles on each lecture.

For the next lecture on February 12th 2020, Katherine Bennett CBE – Senior Vice President of Airbus and Chair of Western Gateway – will be delivering a lecture titled “What does internationalisation mean in the 21st century for global corporations?”.