Putting ESG at the heart of institutional banking services

Stuart Foster, managing director, Institutional Banking at RBS International, explains how his team is helping clients tackle ESG implementation with managing important technology change.

With banking groups taking a proactive approach to both technology and crucial environmental, social and governance (ESG) matters, customers should welcome this as a sign that the financial services industry is raising its game.

For Stuart Foster, however, his team at RBS International (RBSI) is making a more convincing case than most.

By understanding customers’ specific ESG needs, Foster and his team aim to deliver a seamless fund- and asset-level financing and banking service that will evolve as technology itself evolves.

“We know our funds customers face a regulatory minefield as ESG regulation continues to develop,” says Foster. “However, we’re hoping to see further convergence of frameworks following COP26 as we continue to support our customers.”

Facilitating Decarbonisation
Foster, as part of the RBSI senior team, outlines where the firm will help achieve climate-positive goals as part of the parent company NatWest Group.

“Firstly, as a group we intend to be climate-positive by 2025 by reducing our waste, travel, building emissions and paper usage as well as offsetting through the purchase of internationally recognised TIST Carbon Credits.

“Secondly, the events of the past 18 months have also changed the way that we work across the organisation. NatWest Group has co-authored a whitepaper with EcoAct to outline a methodology allowing us to account for the climate impact of our new ways of working, with a commitment to include working from home emissions as part of our 2025 target,” he says.

Related to emission, RBSI is involved with the Carbon Project, which is backed by various banks internationally. This voluntary carbon marketplace promotes high-quality carbon offset solutions, and being a “global first”, Foster says, it also served as a key example of how RBSI’s own commitment to climate “allows us to take our customers with us and provide new propositions to meet their evolving needs”.

He adds: “We are continuing to develop innovative solutions to decarbonise our business, and help our customers do the same. We recognise that carbon offsets will play a vital role in carbon neutrality across markets.”

The new ESG-driven paradigm in investing is as much an opportunity as an obligation, says Foster, who quotes former US vice-president Al Gore’s remark that climate change is “the single biggest investment opportunity in history”.

RBSI has committed to reducing its financed emissions 50% by 2030, recognising the responsibility and influence financial institutions hold within society.

“We are also incentivising funds and customers to meet their ESG targets through products such as sustainability-linked and green loans, where taking positive steps towards sustainability ultimately gets rewarded through being charged less interest” he says.

Aside from the environmental aspect of ESG, RBSI is also helping its customers address social issues and governance factors.

Nurturing talent
Foster has been with the bank for 21 years, working across structured finance, real estate finance and large corporates.

His role has given him the opportunity to be proactive in important development programmes within the broader group. This year, he is an executive sponsor representing RBSI for the talent academy, which was set up to unearth and cultivate talent within the bank, across different grades, backgrounds and demographics.

Last year, Foster was part of the RBSI gender network programme and said he felt very passionate about identifying and investing in talent and providing an environment and opportunities for individuals to thrive.

“As the father of three daughters, I find it incredibly important that everyone has the support and opportunities necessary to grow and be the best they can be, so it really means a lot to have the opportunity to shape such programmes,” he says. “Our people and our culture are central to how we deliver our strategy, so supporting and empowering our colleagues to deliver a best in-class offering including clarity around our climate ambitions is key.”

Restless innovation
With a vision to be a “relationship bank for a digital world”, there is a culture of “restless innovation”, says Foster, meaning a continued focus on the needs of tomorrow and new products and services to solve them.

He cites two key areas for his team at RBSI, the first being the depositary services business, in which RBSI is investing in a digital transformation programme, and a suite of new products including ESG reporting, liquidity monitoring and enhanced benchmarking.

“The second area is eQ, our online banking platform, which is a central offering we continue to evolve and adapt to our customer needs and requirements,” Foster says. “Both of these focus areas really do make a difference to how we operate.”

Trusted advisors
Underpinning it all, however, is fundamental service.

“Our presence in Jersey, Guernsey, London, Luxembourg, Edinburgh, Gibraltar and Isle of Man means that our clients get a team of local experts who understand the customer lifecycle,” he says.

“The market is incredibly active, from the depth of funds flowing in, to the amount of activity around the support services ecosystem. This attracts competition from new entrants given the overall growth and value of the market. It is therefore important we continue to do what we do best, and to make sure we provide excellent customer service while providing that important added value.”

And on this point, he adds: “Of course, it goes without saying that continuing to listen to our customers is crucial; always understanding our customers’ priorities and requirements, especially from an ESG perspective. Like our customers, we’re on a journey with ESG and climate so it’s important we learn together and partner with them to develop products and services that help them meet their goals.”

RBS International Institutional Banking services include banking, fund finance, liquidity and risk management, and depositary services (through separate legal entities). We offer these services to institutional customers located in the jurisdictions where we operate which include Jersey, Guernsey, London, Luxembourg, Gibraltar and the Isle of Man.

© 2021 funds europe



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