Redefining Financial Stability!
The banking industry is at a pivotal moment as it strives to embed sustainability within its operations and strategies. Driven by regulatory changes and increasing stakeholder awareness, banks are now focusing on sustainable finance solutions, risk management frameworks, and initiatives that promote environmental and social governance (ESG). The transition involves redefining operating models to meet present needs while protecting the interests of future generations. This holistic approach eases the risks associated with climate change and capitalizes on opportunities to enhance financial stability and community engagement.
Eoin Daly, the Head of Sustainability, embodies this transformative vision. Inspired by a personal moment with his daughter, Eoin recognized the imperative to address climate change actively. His diverse educational and professional background and commitment to sustainability equipped him to lead this charge. Eoin’s strategic initiatives in banking underscore his dedication to embedding sustainability into the organization’s fabric, ensuring long-term positive impacts. His leadership in building high-performing teams and recognition of the importance of passion, patience, and perseverance highlight his approach to driving meaningful change in the banking sector.
At the Commercial Bank of Dubai, Eoin led numerous sustainability initiatives, including the issuance of their inaugural green bond, establishing a greenhouse gas baseline, and committing to carbon neutrality by 2030. The bank’s proactive stance in integrating sustainability into its strategy has facilitated the successful implementation of these initiatives, aligning with broader industry trends towards responsible banking. By prioritizing sustainable finance solutions and nurturing a collaborative environment, the bank aims to create a lasting positive legacy while backing the ambitions of its customers and contributing to the global sustainability agenda.
Let’s explore how Eoin is leading the charge for sustainable banking solutions:
The Path to Leaving a Positive Legacy
The catalyst for Eoin’s journey into sustainability was a poignant question from his then-seven-year-old daughter, a budding environmentalist. She asked him, “Daddy, what are you doing about climate change?”. His response, “Not enough,” left him distinctly uncomfortable. This discomfort was particularly pronounced when he considered that “meeting the needs of the present without jeopardizing the ability of future generations to meet their own needs” effectively, and practically, translates to “don’t steal from your children!”.
This exchange coincided with the time when Sustainability Reporting became mandatory for publicly listed entities in the United Arab Emirates. Eoin’s “not enough” answer could have easily applied to the Commercial Bank of Dubai (CBD) as well. As the person responsible for Corporate Communications as part of a previous role leading the Customer Engagement team, he discussed this with CBD’s CEO, Dr. Bernd van Linder.
Dr van Linder accepted that for CBD to retain its social license to operate for decades to come, the bank needed to elevate its sustainability efforts. He recognized the need to take more responsibility for the externalities inherent in CBD’s business and to leave a positive legacy. He gave Eoin the opportunity to lead this transformation, and Eoin has been committed to this path ever since.
Building High-Performing Teams for Sustainability
Not only his background in management consulting but also his experience building high-performing teams at CBD have been instrumental in shaping his perspective on sustainability initiatives. Whether it was establishing the Change Management Office, the Channels and Digitization team, or the Customer Engagement teams, he has been fortunate to have been entrusted with building teams to support the delivery of the bank’s strategy.
When it came to establishing the Sustainability team, the same organizational support was needed and the same skills were required. The Board and Executive Committee shared his view that Sustainability needed to be integrated into the bank’s strategy. From a transformation perspective, his view remains that building a sustainable business is the transformation required to enable future transformations.
Embracing Change for Sustainable Impact
In his role as Head of Sustainability, the most rewarding aspect of his job is making an impact! CBD is a bank that embraces and excels in change management. As a result, in just a few years, they have been able to deliver many important initiatives while setting themselves up for future success. These initiatives include the issuance of its inaugural green bond, its greenhouse gas baseline exercise, the revision of its risk management framework, the sponsorship of the first Future Sustainability Forum, and the running of its first sustainability hackathon.
Overcoming Sustainability Challenges
He believes that sustainability is a complex and far-reaching subject, posing layers of integration challenges. Firstly, there is the complexity involved in defining how the bank must evolve to become a sustainable business. This involves an entire review of the operating model. Every function in the bank has a role to play in ensuring the business remains sustainable, and the Sustainability team interfaces with each of these functions on different initiatives.
Early in the sustainability transformation journey, an ESG Council was established with the responsibility for the controlled delivery of material ESG initiatives and the monitoring of related KPIs. The ESG Council has been instrumental in ensuring that sustainability integration challenges are overcome. Part of its success stems from the fact that it is composed of representatives from across the bank with diverse backgrounds.
The Evolution of Sustainability
For many years, sustainability was viewed across the globe and across industries as a cost overhead. For some, this was seen as a compliance cost; for others, it was a marketing cost. Thankfully, this perception is now changing. Organizations are recognizing that being a sustainable business is simply good business sense. Take, for instance, how they, as a bank, assess and respond to climate risk.
If they don’t identify, assess, and properly manage the direct and indirect physical and transition risks associated with climate change, they will be left picking up a sizeable bill. More broadly, evidence is now being built that ESG-oriented businesses enjoy stronger and less volatile financial returns.
So, regardless of whether one wishes to employ the teachings of John Elkington’s triple bottom line and put “people” and “planet” on par with “profit,” it still pays to focus on people and the planet because doing so contributes to the bottom line.
Setting a Greenhouse Gas Baseline
His team has had many successful sustainability initiatives to report on over the last few years. However, some stand out more than others. The green bond has already been mentioned. Another sustainability initiative from last year was the inaugural greenhouse gas baseline and the carbon neutrality commitment for their own operations.
With the support and guidance of external experts, they baselined their greenhouse gas emissions across scopes 1, 2, and 3. The emissions were split into financed emissions and their own operational emissions, predominantly purchased electricity.
While the bulk of emissions come from the former, they realized that before they could engage their customers on their transition plans, they needed to “get their own house in order.” In the build-up to the inaugural Future Sustainability Forum, which they co-hosted with DIFC, they made a public commitment to be carbon neutral for their own operations by 2030. They have already taken steps to ensure that this target is met.
The Key Qualities for a Sustainability Role
Instead of focusing on analysis, environmental science, social science, and risk management, he highlights what he feels are the “3Ps” that anyone taking on a sustainability role needs to demonstrate in abundance. These are passion, patience, and perseverance. Passion is an obvious one. According to him, “You don’t need to be Greta Thunberg or Al Gore, but you need to believe in the cause and recognize that there is no “planet b.”
“Patience is required, as not everyone will share your passion. You need to recognize that everyone is likely to experience their own personal tipping point or calling to lean in on the planet. And perseverance is required because, while you are waiting for others to row in, you need to keep implementing the right changes and setting the right examples for them to follow.”
Harnessing Collaboration for Sustainability Success
One of the many advantages of engaging a broader stakeholder pool is that it creates networks of collaboration. They have made a conscious effort to stand on the shoulders of giants wherever possible. All their proudest achievements to date have involved them partnering for success.
Additionally, he has the luxury of tapping into a fantastic network of sustainability leaders across the banks in the UAE who are all facing similar challenges, and all share selflessly for the betterment of the group. On top of this, he reads whenever he can. There are so many thought leaders and free online courses where anyone can upskill themselves.
Aiding Corporate Transition Journeys
In 2022, his team launched their first materiality assessment to understand the material ESG initiatives on which they should be focusing their efforts. This involved a stakeholder consultation process with customers, NGOs, employees, and other governmental departments. Every year, they refresh this materiality assessment to ensure that they are focusing their efforts on the most impactful initiatives.
Additionally, they pride themselves on being “the bank that is backing their customers’ ambitions.” With every passing week, those ambitions are aligning more and more with their ambition to be a sustainable business, in the case of their corporate customers, or to protect the planet for future generations, in the case of their retail customers.
They engage with their corporate customers by extending sustainable finance solutions to support their transition journeys and with their retail customers by extending green banking products to support the greening of their ways.
A Path to Environmental Impact
As a financial institution, the greatest impact it can have on the environment is through its sustainable finance solutions. In June 2023, they were the first bank in Dubai to issue a conventional green bond. This ring-fenced USD 500 million for green projects aligned to their sustainable finance framework.
In June of this year, they were proud to publish their first Green Bond Report, which highlighted how these green projects contributed to over 100,000 tCO2e in annual financed emissions being avoided. This is the equivalent amount of CO2 that would be sequestered by 7 million trees on an annual basis.
However, their sustainable finance framework is not the limit of their sustainable finance solutions. Transition finance, marked by the definition of sustainability-linked KPIs on corporate loans, forms a key part of their strategy. They have set financial targets for how much sustainable finance they wish to extend to their customers, and they are well on their way to exceeding those targets.
Advice for Aspiring Professionals
Eoin believes there are ample opportunities to drive the sustainability agenda across banking functions. Such roles could include managing climate risk, extending sustainable finance to customers, reporting on ESG disclosures, improving diversity, equity, and inclusion across the organization, implementing positive societal change through community outreach initiatives, changing internal operations to improve the bank’s energy efficiency, and much more.
His advice to professionals aspiring to specialize in sustainability within the banking industry is to take that first step. “Don’t worry about what you don’t know. Don’t let perfection be the enemy of progress. You will learn quickly, and you will have more support than you can imagine helping you learn.”
Transitioning to an Era of Embedded Sustainability
In his opinion, Sustainability could and should become less visible but not less important. Currently, many Sustainability teams, like his team, are driving sustainable change. Sustainability touches on all functions within an organization.
These functions cannot depend on the Sustainability team to shape how they evolve in future decades. There must come a point when that change is so embedded in the strategy, operations, and values of an organization that it becomes second nature—or perhaps more aptly, akin to mother nature.
