Climate Safe Learning Lab: What’s it like trying to change a bank from the inside?

Ahead of the next Climate Safe Learning Lab on 7 October, Head of Intrapreneurship Lydia Hascott shares insights from previous Learning Labs, and what we’ve learnt so far from supporting banking professionals working to advance climate action within banks.

In September 2019, the Lab designed and facilitated the first Climate Safe Learning Lab. The Learning Lab brought together 21 bankers influencing the climate finance agenda within their institutions. These climate intrapreneurs work in a diverse range of roles within large North American and European Banks but have in common that they are change agents straddling the internal world of the bank and the wider stakeholder community interested in the impacts that their institutions have on people and planet.

The Learning Lab provided a confidential peer-learning space where climate intrapreneurs could share their motivations, hopes and fears. While the group clearly expressed concern about the pace of change, they also expressed hope that there is now a palpable sense of urgency. There is a feeling that change is possible now in ways that it was not before. As one participant reflected, “We are now debating HOW to change bank lending. This is a lot better place to be than debating IF or WHY to change.”

The conversation also unearthed several shared challenges, success stories and opportunities among climate intrapreneurs.

Challenges faced by climate intrapreneurs include:

  • A tension between their desire to create a sense of urgency, and being perceived as alarmist which may risk losing their seat at the table.
  • There is a certain orthodoxy in banks about how decisions should be made and whose voices and views have weight, influenced by seniority, bureaucracy and structural siloes.
  • Banks primarily look at retrospective financial performance, but much of the analysis around climate finance is modeled using future-looking scenarios. This breaks with how data is conventionally used in banks, so it is considered less reliable. Without sufficiently acceptable data models, many intrapreneurs feel they risk being dismissed.
  • Some feel strongly that the banking model, based on promoting growth above all else, is fundamentally broken.

“We need to completely reorient how banking works. We need to leave behind the comfortable idea that we are going to have all the data available to make prudent decisions. We won’t have that on climate.”

Participants shared the following successes in advancing the climate finance strategies internally:

  • Working to set a tone from top is having positive impact throughout the institution. The CEO publicly and internally reinforcing commitment to climate policies and frameworks is key to getting action aligned internally.
  • Engaging with decision makers as people, rather than solely their professional role. Through interacting with colleagues beyond their formal job descriptions, intrapreneurs are discovering more alignment and desire to make change, and forging a community inside their institutions.
  • Clients, shareholders, employees and regulators all have significant influence on decision-makers including those at the C-level and Board of Directors. Building allies externally to convey the right message to the right person is an effective tool.
  • Gaining a better understanding of the internal decision-making calculus – the data that matters to those making decisions about transactions or loans.
  • Flipping the paradigm can help convincingly communicate the climate-related risk in a sector or a deal. For example, in a conversation about a lost opportunity when declining a loan or investment due to climate risk, reframing the analysis to look at the risks avoided in other declined transactions in similar sectors can prove successful in making the case.

Participants left the Learning Lab intending to experiment with the following opportunities:

  • Build internal allies to gain C-level buy-in, making it clear how climate action aligns with the CEO’s interests.
  • Advance education agendas across teams inside the bank. Show up more like a guide than a campaigner.
  • Identify low-hanging fruit to demonstrate what is possible in certain sectors that may be more open to taking action while using windows of opportunity as they arise for bolder action.
  • Address the hierarchy of knowledge problem where sustainability officers are not seen as experts in core business functions or the needs of the bank’s clients, despite having deep expertise on climate finance and how it relates to these areas. .
  • Overcome a sense of personal knowledge failure – the perceived need to be an expert in the permutations of climate risk in every sector that an institution serves. Instead, aim to be an expert in helping the bank ask the right questions and find the answers together in this still emerging field.
  • Deal with the “show me the data” mindset by using advocacy strategies such as appealing to common values and normative business cases based on what banks should and ought to do.

Six months after the Learning Lab we re-convened participants online to understand how things had progressed and changed for them since. There had been a notable shift in how these intrapreneurs were experiencing their work on taking climate action internally.

On the whole, they are noticing that responsibility for climate finance was moving beyond the sustainability team into the wider organisation, starting with risk and moving into finance, strategy and the CEO’s office.

“I feel like I went from being in an Off Broadway show in a basement, to being Hamilton overnight. I now meet with my CRO weekly and I meet with my CFO frequently too.” Several participants attributed the Climate Safe Learning Lab with increasing their confidence and “ability to command in the C-suite”.

The role of these sustainability pioneers has also gone from internal advocate to educator. They are deep experts in climate finance, but their wider organisation has a long way to go to develop a nuanced understanding of it.

Being the subject matter experts, these intrapreneurs are grappling with the balance between encouraging colleagues’ enthusiasm and offering challenge where lower levels of capability risk poor decision making. One intrapreneur gave an example about transition finance: “Do I welcome enthusiasm with optimism, saying, “great!”, or do I offer a challenge saying that if it’s about transitioning and we’re not transitioning fast enough then we have to change something?” On the whole these climate intrapreneurs feel they have a responsibility to be more of a truth teller than a yes-person.

These systemic intrapreneurs also recognise that the goal is for climate to become “an embedded managerial issue”, but the managerial mindset requires data and evidence. “We don’t have that right now, we only have what we would normatively like to see happen.” To overcome this, they are seeking to shift colleagues’ mindsets towards “managing to ambition” and “finding courage to act in the not knowing” for the sake of the planet and future generations.

We are continuing to support this growing community of climate intrapreneurs through ongoing peer-learning opportunities. If you are a banker working to influence the climate agenda within your institution, join our next Learning Lab on 7 October here. Find out more about our work with systemic intrapreneurs here.