Does your choice of financial institution make a difference for a more sustainable world?

Sustainability plays an increasing role in our daily lives. We sort waste, insulate our homes to reduce energy consumption and use solar and wind energy as much as possible.  But did you know that your choice of bank also makes a difference? The way a bank manages and invests your money has a direct impact on the environment and society. Johan Thiers, Director of Sustainability at KBC, explains.

‘A bank does more than just hold your money. It also finances companies and projects. If you choose a bank that values sustainability, you know that your savings and investments will not be used to finance harmful or unethical sectors. In addition, many banks offer loans or mortgages which give you an extra financial benefit if you invest in energy-saving measures such as solar panels or insulation.’

‘At KBC, sustainability is part of our DNA . We incorporate sustainability into all our activities and have three clear targets: maximise our positive impact; minimise our negative impact; and encourage responsible behaviour among all employees. All executives are assessed on achieving sustainability targets. And as for that negative impact, our goal is to reduce our own CO2 emissions by 80% by 2030 compared to our 2015 emissions. At the end of last year, we clocked off at 68%, so we are very much on track to meet that target.’ 

‘You see our sustainability policy reflected in the way we design our products and policies. For instance, we provide better financing terms for energy-efficient homes, such as a higher loan-to-value percentage (up to 100% of the purchase price) or a lower interest rate compared to non-energy-efficient homes. That’s how we live up to our climate commitments.’

‘We offer these buyers interest rate discounts on energy renovation loans, thus keeping the improvements they need to carry out affordable. Because properties with an EPC rating of E or F are subject to a renovation obligation  in Flanders, which means the buyer of such a property is required to improve the EPC rating to a D within five - soon to be six - years.’

‘Customers who take out a home loan now and improve their home to an EPC rating of D or better will also receive a discount on their existing home loan for the entire remaining term of the loan.’

‘Finally, we also offer a lower interest rate to borrowers who invest in an electric vehicle, and we offer a wide range of Responsible Investing funds. Those funds invest in companies that meet high environmental, social responsibility and good governance (ESG) standards. In addition, KBC also offers specific socially responsible investment funds which invest in renewable energy projects and green technologies. Almost half of KBC Asset Management's total volume of investment funds are Responsible Investing funds, with assets under management totalling more than 46 billion euros. Responsible Investing insurance policies are also a very important part of our investment-type insurance offering.’

‘We have a strict sustainability policy for all our business activities, which we have brought together in our sustainability framework. That policy gives us the necessary framework to decide on fundamental exclusions, which we then apply to our core and supporting activities. This allows us to identify sectors that we do not want to fund, such as fossil fuels and sectors that are harmful to biodiversity or human rights. Every credit file is assessed against those criteria.’

‘This also means that companies with high carbon emissions or harmful impacts are rigorously evaluated. We exclude companies that do not meet certain standards. We publish these exclusion rules in the interests of transparency on our website .’

‘At KBC we are committed to being a partner in the green transition, both for private individuals and businesses. Check out our KBC Mobile app under 'Offerings' or our website  , for example, to see how we support our customers with information, advice and services from partner companies to help us all live more energy-efficiently. We offer this same support to companies. If we only focus on companies that are already fully 'green', we are not building a more sustainable world.’

‘We therefore advise and guide companies that want to reduce their carbon footprint and financially facilitate their transition to, say, acarbon-neutral production process or an all-electric vehicle fleet. This is how we enable more and more companies to adapt to the new, sustainable reality. We are convinced that sustainable companies are more successful and more likely to survive in the long run than unsustainable companies.‘

‘Gather as much information as you can about how seriously the bank takes sustainability and what steps it is taking to do achieve it. And then you have to make a trade-off: do I choose a bank that very strictly excludes companies that are not yet far enough advanced on the sustainability journey? Or do I actually want my money to enable the sustainable transition of more companies? At KBC, we are not only committed to excluding overly polluting and/or harmful sectors, but also to actively assisting customers and companies that want to become more sustainable. That’s how we as a bank really make a difference - and so do our customers.’