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Kala Desai

As global emissions reach record levels and show no sign of slowing down, global warming and climate change have emerged as the most complex and acute challenges of our time. In the face of these global adversities, collective action powered by new scalable technologies and intelligent solutions will enable us to leapfrog to a more resilient world. These sentiments were echoed at the 26th United Nations Climate Change Conference in Glasgow (COP26). At the summit, the net-zero banking alliance (NZBA)  committed to aligning their lending and investment portfolios with net-zero emissions by 2050. They also committed near-term action with accountability, using robust science-based guidelines and a target for 2030 or sooner.

Over 270 banks have joined this cause and have started working on a strategy based on the principles of a responsible banking framework. The most important principle is to work with customers and encourage sustainable practices based on the Paris Climate Agreement.

Opportunity for banks to influence the net-zero narrative

With the estimated number of internet users surging to 4.9 billion in 2021 from around 4.1 billion in 2019, strong global growth in internet adoption is evident. These users have access to smartphones and are mostly digitally connected. Moreover, most of these user activities and movements are tracked by tech giants like Google, Meta, and Amazon for their targeted ads and revenues. On their part, banks should join hands with these tech giants that collect massive customer data and use it for targeted advertising, structure standardization, and the enforcement of net-zero initiatives and practices. By considering the environmental, social, and corporate governance (ESG) criteria, this responsible banking framework can be further modified based on the customers’ regional, cultural, and personalized requirements. The entire process should be unified, agile, and open to the public. On a high level, the coherent guidance framework can be categorized into five components:


To start with, this section of the framework can bring in insights into the basic concepts of global warming and educate customers on its effects on the planet. Along with this, they should also be made aware of the current scenario, actions taken by governments and non-profit organizations, and most importantly, engagements expected from them as individuals. In addition, banks can incorporate knowledge tests and training programs into this section for customer and community education.


Banks can use simple checklists to assess their customers’ carbon footprint. If needed, banks can team up with technology companies that provide calculators to determine customers’ current energy consumption. Families and even entire neighborhoods can be encouraged to participate in this program.

Guidance and execution

Once customers assess their carbon footprint, guidance and access to various applicable sites on how to adapt to a lifestyle that will reduce carbon emissions should be provided. Customers can plan their future actions to help reduce their carbon footprint accordingly. These actions can span from simple tasks such as replacing the pipeline in the house to a big decision like buying an electric car. Banks can actively help customers with all these decisions by providing support – in this case, by making lists of eco-friendly plumbers, car dealerships, and borrowing options available to customers.  

Tracking and performance

Customers should be able to monitor or track their performance and take corrective actions as necessary, irrespective of their location. For instance, the tracking must continue even if a customer moves to a different location. The entire system can be enabled through blockchain, ensuring a single record is available for each customer. Banks can maintain customer performance scores in a common source like credit score reports or customer identity records.

Reward and recognition programs

Customers can be rewarded with redeemable reward points for positive actions (PA) to reduce their carbon footprint. These PA points must be transparent and linked to customers, allowing them to access their data from anywhere and at any time. Moreover, all banks should have access to the PA points data through open banking and report these customer efforts for audit to the appropriate authorities. To be precise, if a customer has multiple bank accounts, the data should be accessible to all the banks for monitoring the customer’s journey and reducing their carbon footprint. Besides, best practices followed by other customers can be made accessible to all customers.

Partnerships for the people and the future

To conclude, the strategy outlined above is realistic and feasible, and it should be part of the broader organizational strategic plans. Initially, there may be hindrances, and regulatory support is needed for this social cause. If administered and built correctly, NZBA’s banking framework can create meaningful opportunities to accomplish the ESG mission of net-zero emission by 2050 – a win-win situation for banks, customers, and our planet.

About the author

Kala Desai
As a banking and mortgage domain practitioner, Kala has over 20 years of diverse experience across banking, mortgage operations, and consulting services. She has spent most part of her career working with clients to complete the digital and operational maturity assessment of their mortgage business and partner with them to execute transformational programs underpinned by technology as per their budget, goals, and plan. Kala holds a post-graduation diploma in business management. She is also a certified PMP consultant and a certified agile coach.
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