Michael Spiegel is Standard Chartered Bank’s global head of transaction banking. He’s deeply involved in the London-based institution’s sustainability efforts and its customer-facing sustainable finance program development and management.

In an interview during the 2023 SIBOS global conference in Toronto, the Singapore-based Spiegel shared his thoughts on several topics surrounding bank actions in the climate change mitigation space, specifically sustainable investment activities, how the industry is progressing, how his bank is ranked among its peers, and the challenges ahead. Optimistic, yet also forthright, he observes: “We’ve come a long way in terms of development and progress. But there’s much more to do.”

Mentioning not just Standard Chartered’s programs, but also those of the multi-member United Nations (UN)-led Net-Zero Banking Alliance, which his institution joined along with many other global banks in October, 2021, Spiegel states that the industry is definitely making headway toward meeting their individual commitments toward sustainable finance of renewable and regenerative businesses and decreasing greenhouse gas (GHG) emissions.

The latter are measured in three categories according to protocols established in 2001 and increasingly becoming the standard in the business world. These include the institutions’ own activities and energy purchased to run them (Scope 1 and Scope 2), as well as by their external suppliers and customers up and down the value chain (Scope 3).

Spiegel also says that some elements of sustainable finance and climate-change mitigation and transition are simpler to navigate than others.

“Look at green bonds - big projects, large scale programs. [They are] relatively easier to define, despite the fact that still there is no true flow. There are a couple of different standards,” he said, alluding to the nascent nature, the ‘newness’ of sustainable finance as an emerging discipline and focus area for banks.

Observing that some alliances, like the banking industry’s, are continuing to strengthen, while cracks have appeared in others, such as a few companies in the insurance business, Spiegel opines that such retreats may be more about changing emissions-gauging tools and other standards than lack of interest.

“It’s not because they're not committed to Net-Zero I believe, but because the measurements are challenging. As (author and management theorist Peter) Drucker said, essentially what you can't measure you can't manage. Having said all of that, I think we're making tremendous progress as an industry.”

Much of what is discussed and published around the topic of Sustainable Finance concerns lending and borrowing, credit lines being extended for renewable energy, regenerative business innovations and projects. Asked about the emissions and activities involved in day-to-day services provided by banks, assisting their corporate and small business customers with payments and receivables, liquidity, treasury management and reporting on their activities locally, regionally, and across the globe, Spiegel agrees that there are still avenues to be explored. “The world clearly needs to make more progress in the treasury space”, though he did add that SC has introduced sustainable accounts as a new product – where funds are segregated and only deployable for sustainable financing activities.”

Standard Chartered stands out from much of the big bank competition in its global footprint, which in addition to Europe, Asia, the Middle East, and the US in North America, includes offices in several countries in Africa and South America, part of the global south – the half of the world which now and in the future will likely experience much more damaging impacts from climate change than the northern half of the world.

Recently selected “World’s Best Bank for Sustainable Finance" by Global Finance magazine, Standard Chartered also tends to be ranked lower on industry watchdog lists - where lower is better than higher - of global financial institutions continuing to finance fossil fuels, or NOT living up to their sustainability promises. To bolster its stated environmental and social commitments, when the SIBOS event began last week, the bank announced its Sustainable Trade Loan for Financial Institutions, aimed to provide its financial institution clients with global liquidity to support underlying trade flows associated with sustainable development. The focus of the program is on “sustainable end-use – i.e., trade flows supporting investment and spend” in areas where positive social and environmental results might be the goal, specifically in the renewable energy sector and supporting finance of activities like the “installation of wind turbines, the purchase of solar panels, and the sale of renewable energy battery storage systems.”
 
According to Standard Chartered, difficult challenges face companies trying to implement sustainable practices and build more resilient supply chains. “Our own research found that more than two thirds of large corporates and mid-sized firms struggle to obtain funding or finance for ESG- and sustainability-related expenses and investments.” Spiegel also mentions new programs involving “digitally-enabled supply chain financing,” which should be especially helpful for smaller businesses where the bank operates.

Asked about the bank’s internal challenges in meeting its own and responsible investment advocates’ recommendations for quicker and more impactful progress against UN and Net-Zero emissions reduction and clean business transition targets, Spiegel answers: “We're working with industry bodies, and sometimes I feel we're educating consultants on that. Because it is not about putting yourself out (promoting in media announcements). It's about really making it happen. And not to promise something that you will do, then you try to deliver against it and it all becomes a public messaging game. It’s not about publicity. This is really about ‘how do we come together?’ How do we make it happen? How can we demonstrate to the world that we're serious about it?”

Noting that Standard Chartered works in some of the “most complicated and challenged markets”, including many places in Africa and South Asia, Spiegel also urges that the focus be placed on practical problem-solving even as the pace of climate transition planning clearly needs to quicken.

“The reality is, you cannot just go in and say ‘switch off’ a coal fired power plant. You need to replace a coal fired power plant with something else because otherwise you don't have energy. If you don't have energy, mortality rates will go up and so on. We have to find the right measure of how we can support (larger) companies and how we can support the smaller suppliers (too). Because when you go from the big importers down by one or two layers, it’s about how do you actually finance that they can they have (for example) a different type of boiler, right? How do you finance this? It's not easy work.”

Reiterating his point that sustainability should not be about publicity, but about actual achievement of targets, Spiegel concludes: “For me, it is more important that we work with clients, that have internal (emissions and other sustainability) metrics and then over time we get them to publish them in their annual reports. Maybe just the results. I don't mind so much about what their ambitions are. I mind more about what you get done.”