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Ready for Climate Action: Financial Institutions Take First Steps

Picture of Oliver Platt

Oliver Platt

Head of Client Solutions

Financial institutions are advancing climate-centred innovation in response to consumer demands and changes in the macroeconomic landscape due to the climate crisis and the ongoing pandemic.
Initiatives such as environmentally conscious investments, carbon emissions monitoring, and electronic transaction records are being implemented to address consumer concerns. Additionally, tools for mitigating institutional risks related to climate change are being developed.
Financial institutions in Europe and North America are leading the sustainability movement. Mega-banks, card networks, local commercial banks, and financial service providers are recognising the importance of these solutions and working together to implement collaborative strategies.
NayaOne advocates for bank-fintech partnerships as the foundation for a widespread shift towards sustainable finance. Through our digital transformation platform, we facilitate seamless and efficient collaborative advancements.

What are the economic benefits of climate action in financial institutions?

Implementing climate-centric strategies is not just about compliance and corporate responsibility; it also presents significant economic benefits. Financial institutions that proactively address climate risks and invest in sustainable initiatives are likely to gain a competitive edge.
Green finance products, such as green bonds and sustainability-linked loans, are gaining traction and attracting a growing pool of environmentally conscious investors. These products offer financial institutions new revenue streams and enhance their reputation among stakeholders.
Moreover, integrating climate action in financial institutions’ strategies helps mitigate risks associated with climate change, such as physical risks from extreme weather events and transition risks from regulatory changes. By adopting a future-focused approach, climate action in financial institutions can build resilience and ensure long-term sustainability.

World Bank Group's commitment to climate action in financial institutions

The World Bank Group’s commitment to climate finance is a testament to the global emphasis on sustainable development. In fiscal year 2023, the World Bank Group delivered a record $38.6 billion in climate finance, supporting efforts to end poverty on a livable planet. This marks a 22% increase compared to the previous year.
Increasing resources available to developing countries is part of the Bank’s new playbook to drive impactful development and take more risks. The International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) together delivered $29.4 billion in climate finance in FY23, with almost $12 billion specifically supporting investments in adaptation and resilience.
The International Finance Corporation (IFC), the private sector arm of the World Bank, delivered $7.6 billion in climate finance, representing 46% of its investment commitments for the year. Additionally, IFC mobilised $6.8 billion of private capital from other sources, making their total a record $14.4 billion in climate finance. The Multilateral Investment Guarantee Agency (MIGA), the World Bank’s political risk insurance and credit enhancement arm, delivered $1.5 billion in climate finance.
With these results, financing for climate action in FY23—which covers July 1, 2022, to June 30, 2023—reached 41% of the total World Bank Group financing of $95 billion.

What are the technological advancements driving climate solutions in financial institutions?

Technological advancements are at the heart of climate-centric innovation in financial institutions. The integration of cutting-edge technologies is enabling institutions to develop and implement effective climate solutions.
Financial institutions can improve their climate action endeavours, elevate operational efficiency, and propel sustainable growth through the adoption of these technological innovations.

Partnering with NayaOne for climate action in financial institutions

NayaOne leads the way in empowering financial institutions to drive impactful innovation and effective collaboration in their climate action efforts. Our digitisation platform provides a seamless and streamlined approach to incorporating sustainable finance solutions.
By partnering with NayaOne, financial institutions can leverage our expertise and technology to drive impactful climate-centric strategies, ensuring compliance with regulatory frameworks and tapping into new economic opportunities. Explore our platform to see how we can support your journey toward sustainable finance.

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