Sustainable finance revolution

The transition to a net zero economy is a pressing global challenge that requires substantial capital support from the private sector. Financial institutions have the opportunity to play a pivotal role in this transition and achieve substantial gains. By adopting a sustainability-first approach, they can mitigate risks associated with climate change and tap into lucrative markets that prioritize environmental responsibility.

The potential for economic growth through sustainable investments is immense, and the time to act is now.

Learn more about how the banking industry can position themselves for the future in Sustainable finance revolution: how banks can profit from sustainable growth.

Key themes

wind_power

Urgent need for climate finance

There is a critical requirement for substantial capital to facilitate the transition to a zero-carbon future. Some experts believe three times the current global spending is necessary to meet Paris Agreement commitments.

account_balance

Role of banks in sustainable finance

The financial services sector is witnessing a surge in demand for sustainable finance solutions, presenting banks with the opportunity to lead in decarbonization initiatives while managing risks and stakeholder expectations to achieve net zero goals.

monetization_on

Investment opportunities across sectors

KPMG has identified four essential areas of sustainable finance that present examples of how banks can crystallize their sustainability lens: agriculture, adaptation, infrastructure and retail housing. Real word examples demonstrating the breadth of opportunities of investment with convincing returns and discernible climate-positive impacts are presented.

recycling

Building a sustainable financial ecosystem

A successful economic transition requires banks to integrate sustainability throughout their value chain, utilizing advanced credit-decisioning, risk pricing capabilities, and innovative products to effectively support customers in their decarbonization efforts amidst the complexities of transition finance.

Key areas of opportunity

Agricultural finance

Agriculture finance is vital not just because of its contribution to emissions, but also in climate change adaptation and mitigation efforts, supporting sustainable practices that enhance resilience against climate impacts. It enables investments in technologies and practices crucial for reducing emissions, improving food security, and promoting environmental sustainability in agriculture.

Adaptation and resilience

Adaptation and resilience refers to financial resources dedicated to helping countries, communities and businesses adapt to the impacts of climate change. This can include funding for infrastructure improvements, new technologies and capacity-building initiatives that increase resilience to climate change impacts. An ideal model combines funding from the public sector, the private sector and financial services sector.

Infrastructure finance

Investing in sustainable infrastructure is critical for mitigating the impact of climate change. Sustainable investment in the construction and maintenance of infrastructure will help to develop new and more sustainable methods and technologies, leading to a lower carbon footprint.

Retail housing

Greening retail housing involves making residential buildings more environmentally sustainable by integrating energy-efficient features, water conservation measures, and sustainable materials, addressing the significant GHG emissions from the buildings sector, which is crucial for long-term climate risk mitigation as urban housing demand increases.

Sustainable finance revolution

How banks can profit from sustainable growth

Download

Contact us

Ovais Shahab

Ovais Shahab

Partner, Head of Financial Services

KPMG in Saudi Arabia

mail

Fadi Al Shihabi

Fadi Shihabi

Head of ESG & Decarbonization

KPMG in Saudi Arabia

mail