Bancolombia Named One of the Five Most Sustainable Banks in the World
At the World Economic Forum Annual Meeting in Davos last week, Colombia’s largest financial institution was recognized as one one of the five most sustainable banks in the world. Medellín-based Bancolombia was honored with a silver award from RobecoSAM, an international investment firm located in Zurich, Switzerland that has been producing an in-depth study into corporate sustainability since 1999.
The top four banks in the world were all from Australia, including the top three that were given gold status: Australia and New Zealand Banking Group Ltd, National Australia Bank Ltd, and Westpac Banking Corp. Along with Bancolombia, the Commonwealth Bank of Australia and Banco Santander SA of Spain were also included in the silver class grouping.
Photo: Bancolombia headquarters in Medellín, Colombia. (Credit: Bancolombia)
RobecoSAM’s “Sustainability Yearbook 2017” covers virtually all industries, not just financial services. Air France-KLM took home first place in the airline category, for example, while Hewlett Packard Enterprise and Nestle finished number one in computers and food products, respectively. RobecoSAM says that only the top 15% of companies within each sector are selected to even be included in the analysis showing that it believes Bancolombia really is among the best of the best. There were 256 banks evaluated in this year’s report.
“This recognition is an achievement that has a great significance for everyone, not only for our organization but also for Colombia,” said Juan Carlos Mora Uribe, president of Bancolombia.
In terms of banking, RobecoSAM says that it is seeing industry firms of all stripes increasingly focus on sustainability because investors and, consequently, boards are demanding it. In addition to lowering regulatory scrutiny and overall risk, it is simply improving the potential to make money.
“By effectively integrating sustainability and principles of ethics and customer-centricity throughout the bank, both credit and operational risk levels are lower, which enhances a bank’s capacity to generate long-term economic, environmental, and social value,” states the firm in its report.
While sustainability discussions generally focus on environmental impact, RobescoSAM is trying to get the word out that other aspects are equally vital. In particular, RobecoSAM CEO Aris Prepoudis says that right-minded companies need to care about communities enough to ensure that their operations don’t harm human rights.
“Over the past few years, investors, consumers and society at large have been paying closer attention to companies’ social impacts, particularly in the area of human rights,” wrote Prepoudis. “With the launch of the UN Guiding Principles for Business and Human Rights in 2011, companies have also begun to recognize that the protection of human rights is not the sole responsibility of the state and that they too are also responsible for ensuring that their activities do not have a negative impact on people.”
Its annual yearbook also found that many companies talk a lot about sustainability but fewer actually walk the walk. Four of out five firms in their study claimed to value their overall impact on the world. But when held up to scrutiny, analysts agreed that only 25% of those put real value on their impact in practice.
Prepoudis believes that the changing nature of expectations means that this needs to change. “By evaluating corporate sustainability practices, we are sending the message that investors expect companies to focus on long-term value drivers rather than on short-term profits,” he wrote.