CLIMATE ACTION IN BANKING & FINANCE

FORLIANCE empowers the banking and finance sector to achieve sustainability goals through tailored climate strategies, precise emissions analysis, and impactful nature-based solutions that drive measurable environmental and social outcomes. 

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HOW FORLIANCE CAN HELP THE BANKING AND FINANCE SECTOR TO BE MORE SUSTAINABLE

 

In today’s financial landscape, institutions face mounting pressure to align their operations with environmental and social governance (ESG) standards. The banking sector, in particular, grapples with challenges such as integrating climate risk assessments into lending decisions, meeting stringent reporting requirements, and transitioning to sustainable investment portfolios. For example, banks are increasingly required to disclose their financed emissions and demonstrate how their lending practices contribute to climate goals.

By providing accurate carbon footprint analyses, developing science-based emission reduction targets, and facilitating investments in high-quality climate projects, FORLIANCE enables banks to not only comply with regulations but also to lead in sustainable finance. Our approach ensures that financial institutions can make informed decisions that benefit both their stakeholders and the planet. 

KEY CLIMATE CHALLENGES IN THE BANKING AND FINANCE INDUSTRY

Integrating Climate Risk Into Financial Decisions

Banks must assess and manage the physical and transitional risks associated with climate change. This includes evaluating how extreme weather events or policy shifts could impact asset values and creditworthiness. Failure to incorporate these risks can lead to significant financial losses and reputational damage.

Meeting Regulatory Reporting Requirements

The introduction of regulations like the Corporate Sustainability Reporting Directive (CSRD) mandates detailed disclosures on sustainability practices. Banks need robust systems to collect, analyse, and report ESG data accurately. Non-compliance can result in legal penalties and loss of investor confidence.

Transitioning to Sustainable Investment Portfolios

Shifting investment strategies to support low-carbon and sustainable projects is essential. Banks face the challenge of identifying viable green investments and restructuring portfolios without compromising returns. This transition requires expertise in sustainable finance and risk assessment.

Engaging Stakeholders in Sustainability Initiatives

Effective communication with clients, investors, and regulators about sustainability goals and progress is crucial. Banks must develop strategies to transparently convey their commitment to ESG principles, fostering trust and collaboration.

Developing Innovative Green Financial Products

Creating financial products that support environmental objectives, such as green bonds or sustainability-linked loans, is a growing demand. Banks need to design products that meet market needs while ensuring environmental integrity and compliance with standards.

Building Internal Capacity for Sustainability

Implementing sustainability initiatives requires knowledgeable staff and integrated processes. Banks must invest in training and system upgrades to embed ESG considerations into their operations effectively.

IMPACT-DRIVEN SUSTAINABILITY CONSULTING FOR THE BANKING & FINANCE SECTOR

OUR SOLUTION

 

Emissions Analysis & Reporting

FORLIANCE conducts detailed assessments of banks' carbon footprints, enabling them to understand and manage their direct and indirect emissions. This data forms the foundation for setting realistic reduction targets and tracking progress over time.

CSRD-Aligned Reporting Support

We assist banks in aligning their reporting practices with CSRD requirements, ensuring transparency and compliance. Our expertise helps institutions navigate complex reporting standards and avoid potential pitfalls.

Financing Climate Projects

FORLIANCE connects banks with high-quality, nature-based climate projects that offer credible carbon credits. Investing in these projects allows banks to offset emissions and support global sustainability efforts, enhancing their ESG profiles.

Stakeholder Communication Strategy

We develop comprehensive communication plans that articulate banks' sustainability commitments and achievements. These strategies foster stakeholder engagement and reinforce the institution's position as a leader in sustainable finance.

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Commerzbank Case Study

 

FORLIANCE partnered with Commerzbank to design a strategic climate initiative focused on measurable corporate responsibility. A detailed analysis of business travel emissions identified key hotspots, leading to tailored reduction strategies. 

To complement these efforts, Commerzbank invested in high-quality, nature-based projects certified by standards like the Gold Standard—supporting climate goals, biodiversity, and local communities. The long-term partnership ensures ongoing, credible guidance aligned with international sustainability standards.

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With deep expertise in the aviation sector, FORLIANCE helps you turn complex climate challenges into actionable, industry-ready solutions — start your transformation today.

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FAQs ON CLIMATE SOLUTIONS FOR THE BANKING AND FINANCE SECTOR

 

How can banks effectively measure their carbon footprint?

Banks can measure their carbon footprint by conducting comprehensive assessments of their direct and indirect emissions, including those from operations, supply chains, and financed activities. Utilizing standardized methodologies ensures accuracy and comparability. 

A key component is the inclusion of financed emissions (Scope 3, Category 15), which often represent the largest share of a financial institution’s carbon footprint. Working with experienced partners like FORLIANCE ensures data integrity and alignment with global reporting frameworks such as the PCAF standard.

What are the benefits of investing in nature-based climate projects?

Investing in nature-based projects allows banks to offset emissions, support biodiversity, and contribute to community development. These projects often provide co-benefits that align with broader ESG goals. Additionally, they can enhance the bank’s sustainability narrative and demonstrate a tangible commitment to environmental stewardship. High-quality projects with verifiable impacts also reduce reputational risks and create long-term value for shareholders and stakeholders alike.

How does CSRD compliance impact banks?

CSRD compliance requires banks to disclose detailed information on sustainability practices, risks, and impacts. Meeting these requirements enhances transparency, builds stakeholder trust, and can improve access to capital. It also ensures comparability of ESG data across institutions, helping investors make informed decisions. By proactively aligning with CSRD, banks can gain a competitive edge in the transition to sustainable finance.

What role do green financial products play in sustainability?

Green financial products, such as green bonds and sustainability-linked loans, enable banks to fund environmentally beneficial projects. They also attract investors seeking to support sustainable initiatives. Moreover, these instruments signal the bank’s proactive role in enabling the low-carbon economy and can drive innovation in product development. Regulatory support and growing market demand further solidify their strategic importance in banking sustainability.

How can banks engage stakeholders in their sustainability journey?

Banks can engage stakeholders by transparently communicating their sustainability goals, progress, and challenges. Regular reporting and inclusive dialogue foster trust and collaboration. Initiatives like stakeholder mapping, feedback loops, and materiality assessments can enhance the relevance and effectiveness of sustainability strategies. This level of engagement also supports better alignment between financial services and societal expectations.

What steps can banks take to build internal capacity for sustainability?

Banks should invest in staff training, integrate ESG considerations into decision-making processes, and establish dedicated sustainability teams. This internal capacity is crucial for implementing effective sustainability strategies. In addition, cross-departmental collaboration and leadership commitment are essential to embed climate goals into core business models. Tools like sustainability scorecards or ESG integration frameworks can further support institutional learning and accountability.

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FORLIANCE GmbH
+49 (0) 228-969 119 – 0
info@forliance.com

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Eifelstraße 20
53119 Bonn
Germany