While certain aspects of ESG are complex and sometimes controversial—such as climate-related risks—many banks are finding that they can embrace investors’ interest in ESG factors.
“This is about telling your story,” says ABA SVP Joseph Pigg, who leads ABA’s ESG work. “Community banks in particular have a really good story to tell to investors—it’s focused on how you engage with your community, how you treat your employees and your good governance.”
For example, in 2021 New England-based Berkshire Bank unveiled a three-year, $5 billion ESG-focused investment initiative focusing on small business lending, community reinvestment, financial inclusion and the environment. “We may not have called it ESG or DEI-type initiatives in the past, but we’ve always done it,” Berkshire Bank President and CEO Nitin Mhatre says on the ABA Banking Journal Podcast. “It’s really just taking the things we’ve done in the past and translating that into what makes an impact.”
More recently, Valley Bank—a $41 billion New Jersey-based bank with operations in the northeast and the south—released its first-ever ESG report. “Our first annual ESG Report highlights how Valley continues to make strides in its efforts to have a positive impact on the communities we serve and in the world in which we live,” says Valley Bank CEO Ira Robbins. “We recognize the critical role we play and the unique opportunity we have to create a socially responsible and sustainable future. That’s why we’ve dedicated our resources and leaders to making ESG a priority at Valley.”
The report covers the bank’s environmental, social and governance-related impacts and provides Valley an opportunity to highlight for investors actively seeking this information the bank’s DEI focus, affordable housing investments, climate change mitigation lending and board diversity, among other aspects of Valley’s business.
