ESAF Small Finance Bank has joined the growing tide of financial corporations world-wide in their fight against the practice of “greenwashing” or faking environment, social, and governance (ESG) credentials.
ESAF’s vow to fight greenwashing comes against the backdrop of the observance of Banking on Values Day by the Global Alliance on Banking on Values (GAVB). The bank was recently awarded the “best in class” rating for ESG practices from CareEdge Ratings. The GABV had called out “greenwashing” while urging the global financial sector to back up their big words with real action as the climate crisis accelerates.
First Indian bank
ESAF is the first Indian member bank of GAVB. Both the rating credential and ESAF Bank pivot towards strict ESG compliance comes at a time when world leaders are hotly debating the burning issue of making more finance available to reduce carbon footprint to achieve the net zero goal at the United Nation’s Climate Change Conference (COP 27) at Sharm el Sheikh in Egypt.
ESAF Bank in a statement said the rating agency which assessed its ESG practice gave four out of five points for the bank’s commitment towards ESG integration. ESAF Bank has been maintaining a well-defined policy towards environmental and social sustainability and has effectively implemented it across its business verticals.
“With this recognition, ESAF has become an entity with global ESG standards. ESG will only have a positive impact if there is a deep understanding and agreement by the senior leadership about the social and environmental impact it wants to achieve through their business. Unless sustainability, climate action, or social impact are consistent with the overall values of the business, they will not be genuinely transformative,” said K Paul Thomas, MD and CEO, ESAF Small Finance Bank.
Technically, “greenwashing” refers to a situation wherein a corporation or a firm spends more time and money on marketing itself as environmentally friendly than on actually minimizing its environmental impact. In other words, it is a marketing ploy intended to mislead consumers who prefer to buy goods and services from environmentally conscious companies.