Alex Lawson, Regional Director of Hedging – UK and Europe at Western Union Business Solutions
The world is at a turning point when it comes to the fight against climate change, no longer can entire industries sit back and watch others do the work – action from all is required. When I reflect on the efforts of our own industry, we are in a transition phase when it comes to sustainability. We are gradually challenging pre-conceptions about financial organisations’ duty to take a stronger, more active role in the fight against climate change – but more can, and must, be done.
More and more, businesses are increasingly facing pressure from customers and partners who are voting with their feet and opting to work with organisations that are applying a sustainable lens to their business processes. In many cases, some of the easiest and most effective sustainable changes can be made by reviewing functions the organisation is already running, or services they already offer, allowing for easy, yet impactful, action.
So how, and why, should financial organisations be applying sustainable practices to their business?
A collective effort
The finance industry is one of the driving forces of the UK economy, combined with the fact that in 2020 the total number of people employed in the financial services sector in the UK amounted to approximately 1.1 million – our industry has significant influence With that comes great responsibility to set a good example. In the wake of COP26, customers and partners alike are increasingly looking to work with companies that are embedding sustainable practises into their work. Financial organisations cannot afford to ignore this move.
For both reasons, it is incredibly important that we respond to the changing direction of the world’s priorities and shift our attention to the imminent environmental threat facing our planet. Going into 2022 and beyond, it is imperative that as an industry, we are able to put on a united front and demonstrate that finance can be a force for good.
A sustainable perspective
When it comes to making a significant difference to the climate change effort, far too often businesses assume this can only be achieved with grand gestures, rolling out business-wide sustainability programmes or pioneering new initiatives. In reality, sometimes the most impactful results can often come from making small changes to existing functions the organisation is already running, or services they already offer.
In fact, one of the easiest ways to make a positive change is through ongoing customer work. Day in and day out innumerable financial transactions occur. It therefore makes sense to look at how they can be adapted so that small incremental changes create a significant cumulative effect. For instance, we are now enabling all new and existing customers to support sustainable initiatives as part of their existing foreign exchange hedging strategy. By making a small adjustment to the rate achieved on a planned hedge transaction, funds are generated and invested in climate and sustainability initiatives selected by the customer, who then receive certified carbon offsets in return.
For those financial organisations looking to make an even more significant difference they can use their own financial force to amplify this impact, which is why we match the customer’s donation, with the customer receiving full credit. Whilst simple, if every financial organisation – big, medium and small – re-evaluated existing business processes and applied a sustainable lens, the resulting impact could be far greater than one grand initiative.
Choosing a sustainable partner
We must not forget that in the finance world, customer confidence is imperative to business transactions and proceedings which is why when it comes to making sustainable commitments, for both customer belief and the wider global picture, it is essential that these initiatives are making a real, genuine impact.
This is why opting to work with an accredited organisation that embodies best practice for climate and sustainable development initiatives, can prove invaluable in ensuring an organisation’s customers can be confident in the integrity of every green investment made.
When it comes to choosing a trusted partner, there are a variety of organisations already out there that are dedicated to identifying sustainable and climate initiatives that are designed to quantify, verify, certify and maximise progress towards the UN’s Paris Climate Agreement and the Global Goals for Sustainable Development. For instance, we partnered with Gold Standard, a recognised climate and sustainability pioneer, to roll out our Green Hedging product. By opting to work with a trusted partner financial organisation, and their customers alike, can rest assured that their work is having maximum impact. What’s more, the business can leverage the relevant insights and expertise to expand and develop future sustainable initiatives.
As we look ahead to 2022, we hope to see more businesses applying a sustainable lens to existing business processes, and in doing so, this movement will increasingly demonstrate how the world of finance can truly become a force for good.
