In recent years we have seen an increase in awareness about the importance of sustainability in the context of business practices and the functioning of the global economy, as a consequence of the profusion of regulatory initiativesespecially in the European context. Sustainability is now on the strategic map of companies and organizations. And that’s good. In Europe, banks play a crucial role in acceleration of sustainable transitionacting not only as financiers, but also as partners in sustainability initiatives.
As financiers, banks play a fundamental role in guiding companies and projects since, through the granting of credit and investment, they can direct capital flows to activities that promote sustainability not just the companies themselves, but also the economy as a whole. By prioritizing the financing of sustainable initiatives, such as sustainable mobility projects, circular economy, regenerative agriculture and low-carbon technologies, banks contribute to the mitigating the effects of climate change. At the same time, by supporting social impact initiativessuch as affordable and inclusive housing, and social entrepreneurship, promote social inclusion and equitable development. In this way, a new market of value creation opportunities for companies as well as for society.
A integration of environmental, social and governance (ESG) criteria into investment decisions has assumed increasing importance in the banking sector, aligning itself with global commitments such as the Paris Agreement and the European Green Deal. Both in Portugal and in Europe, banks assess not only the financial viability of projects, but also their social and environmental impactincluding physical and transition risks. With this new way of working Financial institutions directly contribute to sustainable development goals, promoting the transition to a carbon-neutral economy and encouraging companies to adopt more responsible and conscious practices.
O advicea financial literacy and the technical support These are other services that banks can offer companies in the context of their sustainable journey. Many small and medium-sized companies in Portugal still need knowledge about the framework and implementation of sustainable practices and access to green financing. Through specialized teams and partnerships with experienced consultants, banks provide very useful resources that contribute to an effective understanding of sustainability challenges and opportunities, helping to incorporate this topic in the creation of additional value for their products or services made available to customers. Also, in this way, o financial sector promotes sustainable transition and increasing the resilience of economies locations.
At the same time, regulation and public policies have encouraged increased bank involvement in sustainability. The Portuguese government is aligned with European Union guidelines and has promoted tax incentives and support programs for companies who seek to adapt to sustainable practices. On the other hand, as financial intermediaries, banks have the responsibility and opportunity to participate in this transition process, offering adapted financial products to support these efforts.
However, environmental and social challenges remain, as do increasingly demanding criteria for ethical, transparent and efficient management. The transition to a more sustainable economy requires a long-term commitment and a shift in mindset across all sectors. Banks recognize and incorporate this change, reconciling short-term results and their business strategies with sustainability objectives. This transformation in the culture of financial institutions also presupposes a closer collaboration between the public and private sectors.
The commitment to sustainability must be taken very seriously. If, on the one hand, banks and companies have to comply with increasingly strict regulations, on the other, Consumers are increasingly paying attention to the sustainable practices of institutions. These practices have also started to influence the ability to attract talent, with candidates and employees increasingly demanding in relation to identifying with the culture and values of the companies where they work. Therefore, any attempt to greenwashing by any company, including banks, can result in significant reputational damage that is difficult to correct. Therefore, it is crucial that banks have a clear due diligence policy, excluding polluting sectors and investing in areas of economic activity that benefit the preservation of the environment, for example.
In conclusion, the role of banks in Portugal in accelerating the sustainable transition of companies and the economy is fundamental. Through responsible financingyes integration of ESG criteria and the technical support for companiesbanks can be the catalysts for change. If this opportunity is taken advantage of, the financial sector will be able to contribute to a more sustainable and prosperous future, ensuring its own relevance, growth and competitiveness, alongside the recognition of customers, the regulator, the market and society in general, who are increasingly more aware of ESG issues.
