Sustainability Without an Ulterior Motive
“The financial sector is headed down the wrong path,” says the Danish Head of Sustainability at South East Asia’s largest bank. He is at the helm of projects that have to have a positive social and environmental impact – without focusing on the bottom line.
"I couldn't imagine a lot of employees. That's not what this is about",
Danish Mikkel Larsen says with certainty. He has no ambitions of leading a larger group of employees as Head of Sustainability at DBS, which has 26,000 employees and was named World's Best Bank last year. Instead, he works with a team of about 15 handpicked, committed employees, spread across several countries, to get sustainability to permeate all levels of the bank.
"We are still working on managing the way we as a bank think and act in this field. The absolute best chance we have at creating a sustainable future is to think about environmental impact and social impact in our lending".
It is also very important that employees embrace sustainability:
"Everyone should feel they have their own small part in the bank's sustainability. Otherwise, it doesn't go deep enough", says Mikkel Larsen, who has been engaged with the subject for a long time and has been with the bank for seven years but has only been with his current position for two years.
Here at the headquarters in Singapore, some of his employees sit side by side with colleagues who are deeply specialised in other branches of the company and yet barely know anything about the bank's sustainability, although it is clearly and prominently spelled out on the website. But at the top level, they have woken up:
"The bank's management is aware that it is high time to do something about sustainability. It's not about the bank figuring out how little it can get away with and still call itself sustainable. I am very aware of greenwashing and work to ensure we're doing something that makes a difference – it's not done by offering green loans and bonds".
The Singapore government founded the bank in 1968 and it is still mostly owned by the state. Mikkel Larsen feels the ownership and close relations can be an advantage when something needs to change in the sector:
"When bank managers here in Singapore are called to meet with our financial supervisory authority and they propose that something be done differently by the banks, you can reasonably expect it to be done".
Sustainability is something that is a common focus in Singapore at the moment. Many advertisements in the hot city, where air conditioning has been turned up in most places, have it as the focal point of their message. Green, climate-friendly, sustainable, future-proof.
Mikkel Larsen also feels that his management is responsive to the projects and ideas he develops with his team.
"I've been noticing that I'm getting our very top managers to come up with sustainable ideas as group work. Many of them are fully engaged with it and eager to share their ideas, a good many of which are suitable for going ahead with".
New measurement methods
Mikkel Larsen keeps looking up at the computer in his small office with a glass partition facing out to the rest of the department and develops his presentations based on different scenarios. With graphs and charts, he enthusiastically demonstrates how it is possible to do things sustainably and where to put the efforts.
But even though he is studying sustainability at Cambridge and is knowledgeable in the field, he also recognises that it is difficult to measure the overall impact of many initiatives. The bank itself is working with partnering with experts and a university to develop new measurement methods.
"It's still a little fluffy. Some values can be measured, but others don't make sense. For example, what would be the impact if we didn't lend to the tobacco industry? There are health perspectives, employment perspectives and a lot of other things to consider. Not everything can be measured and made into charts in a meaningful way".
An hour for the planet
Internally, Climate Week has been held for all employees, who have formed interest groups on sustainability around the organisation and employees can dedicate up to fifteen per cent of their working time to working towards sustainability.
"There are a lot of different suggestions from the employees. For example, in the Indian part of the organisation, they have a thing called 'Earth Hour' – where you turn off the air conditioning for an hour during working hours".
DBS has also asked customers about initiatives they can think of.
"Their responses are pretty specifically that we just have to plant trees and we're also involved in these types of projects. We need to start getting customers to think about sustainability in a more advanced way, until then it's easier to have a conversation about it with companies. But we'll probably get there".
Solar panels for the homeless
In keeping with the UN's 17 Sustainable Development Goals, the bank also considers sustainability to be a social responsibility. The business model is strongly inspired by so-called "Doughnut Economics", which tries to incorporate the balance between environmental and social impact into all decisions.
Right now, they are working on an idea of the bank supporting a project with solar panels being installed on newly-built houses for the homeless – there are 65 million of them in Asia. The solar panels have to produce more power than the socially vulnerable residents of the sustainable houses can use and the green power is bought by the bank.
"This is the type of project I believe in. If people don't find a more sustainable path, we will not save the world. It's indisputable", says Mikkel Larsen.
It simply has not gone very well for the financial sector, or at least there is not enough action on the matter, he says:
"In my opinion, the financial sector on a global level is going down the wrong path in its approach to sustainability. You have to think about it in a totally different way without focusing on the impact on the bottom line".