[LUM#23] Green Banks, and Against Everyone
Last October, the Net-Zero Banking Alliance—the UN’s carbon-neutrality initiative for the banking sector launched in 2021—announced the end of its operations. This failure, however, has not prevented many regional banks from embarking on their own transition, as suggested by a case study conducted by Christine Marsal, a researcher at Montpellier Research in Management.
“We will drill, baby, drill”—Donald Trump’s campaign slogan set the tone, and it certainly wasn’t a green one. In the wake of his election in 2024, six major U.S. banks announced their withdrawal from the Net-Zero Banking Alliance (NZBA). This United Nations program—which aimed, among other things, to stop financing fossil fuels—had brought together more than 150 banks worldwide at the time. But since then, “the program has been stalled, ” laments Christine Marsal, a researcher at Montpellier Research in Management, “even though it had led to incredible progress!”
Green Bonds
To be more precise, it was the combination of the NZBA and the European regulations developed since 2020 as part of the Green Deal that enabled the banking sector to begin its ecological transition. “Europe has this tremendous strength of proposing standards that set common goals. A whole set of regulations has thus been implemented, introducing new obligations for the banking sector,” notes the professor, who teaches management sciences atthe IAE.
To ensure compliance, many banks have therefore created positions—or even entire departments—dedicated to climate change. Their mission? “To establish indicators that will make it possible to set goals and report on the work accomplished in support of the transition through detailed and easily accessible reporting, as required by the European Union,” explains the researcher.
But how can a bank help protect the planet? “Through green bonds, which have seen rapid growth in the wake of the Paris Agreement. ” These bonds can finance renewable energy by offering customers investments in this sector, as well as research and development and transportation—by promoting loans for electric cars or energy-efficient home renovations, among other things. But banks still need to convince their employees to sell these products and their customers to buy them.
Strong structure
Christine Marsal conducted a case study with a CSR (corporate social and environmental responsibility) manager hired by a regional bank in Montpellier (“Information Asymmetry in Fighting Climate Change: Empirical Evidence from a French Regional Bank Based on Structuration Theory”, 2024). The researcher was able to conduct two rounds of interviews with bank employees and gain access to various reports in an effort to understand how the transition is taking place within a bank branch.
Her thesis? To show that a shift in practices is made possible by a dual process involving both internal and external structures. “This theory, known as the theory of strong structuration, was developed by the Australian sociologist Rob Stones,” she explains . She argues that change within an organization can be driven both by key actors—who influence individuals’ internal structures by altering their beliefs to strengthen, for example, their commitment to the fight against global warming—and by the organizations themselves, by modifying external structures through the creation of a department dedicated to climate change or by organizing training sessions, discussion groups, and so on.
A Special Case
“What convinced me to conduct this case study was the profile of this CSR manager,” explains Christine Marsal. “He lives and breathes his commitment and goes to great lengths to educate others about the regulations and convince employees of the need to comply with them. In fact, all the participants in the interviews I conducted acknowledge his charisma and significant influence.” ” In particular, this manager has established a network of ambassadors within the bank who act as liaisons throughout the organization.
The interviews conducted by the researcher also revealed resistance among some employees. “To them, this regulation is nonsense; they want to do business and believe that financiers have no business taking an interest in the oceans. ” There is also resistance among the bank’s clients, whom Christine Marsal was able to reach through a series of interviews conducted by her students, in which the fear of an uncertain investment—especially when it comes to green products—or suspicions of greenwashing often act as deterrents. “This reflects a lack of trust in banks, but it also shows that when it comes to money, the environment is no longer really the priority.”
On the Right Track
This observation does not prevent the researcher from drawing a positive conclusion from this case study. And even though these conclusions are limited to this bank and closely tied to the personality of this manager, Christine Marsal asserts: “Things are changing. Banking
are evolving their structures, and attitudes within the sector are maturing, just as those of customers are—not all of them, but some. The NZBA’s ruling is certainly a negative sign, but something is underway.” Still, that path must be a green one.
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