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Most Financial Firms Have No Long-term Net Zero Plan

Fewer than a quarter of financial services and investment companies worldwide have a net zero transition plan that looks beyond 12 months, according to a new survey by law firm Mayer Brown. The survey covered 635 business leaders across Europe, Asia, the Americas and the Middle East, finding widespread lack of preparedness for the energy transition – even though the majority considered decarbonisation a priority. Just 19% of financial institutions – which included banks and insurance companies – had net-zero transformation strategies that looks beyond the next 12 months, the survey found. The figure went up to 27% for investment firms – a class that included asset managers, investment banks and private equity houses. That unpreparedness contrasted with broad agreement that the issue was important, as 77% of investment firms and 69% of financial institution leaders believed companies must embrace sustainability if they are to thrive. Around two thirds of respondents also acknowledged they were not transforming fast enough. Still, climate and ESG did not figure in financial services companies’ top-three concerns, which were: lack of growth opportunities in difficult market conditions; cybersecurity and other tech-related threats; and burdensome tax environment. For investment firms, the cost of the net-zero transition was the number two concern, behind burdensome taxes and ahead of lack of growth opportunities.

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