North American banks have the biggest opportunity by financing decarbonisation
Global banks could unlock $44 billion in annual revenues by 2030 by supporting businesses in transitioning to low-carbon models, according to a new Bain & Company report. The study identifies corporate loans as the primary driver of these potential gains, with North American banks poised to lead the charge.
North American financial institutions could capture $19.3 billion in annual revenues by financing decarbonisation efforts, while Europe, the Middle East, South America, and Asia-Pacific trail with projected revenues of $7 billion, $5.5 billion, $3.7 billion, and $8.4 billion respectively. Post-2030, Asia-Pacific banks are expected to overtake their peers, emerging as leaders in low-carbon investment profitability.
Research says banks will generate $44bn in incremental revenues annually to 2030 from financing the energy transition
“The low-carbon transition represents a substantial investment opportunity for banks,” said Christian Graf, Bain’s head of sustainability and responsibility for financial services in EMEA. “Banks that see this gap as an opportunity stand to reap significant rewards.”
The report suggests banks will need to contribute $600 billion annually by 2030 to close the global investment gap for a greener economy. This figure dwarfs the $430 billion from corporates and $350 billion from governments. By 2050, banks engaged in low-carbon financing could boost profits by up to 30%.
With the transition to a low-carbon economy accelerating, the report underscores the vital role of financial institutions in facilitating the shift while capitalizing on emerging revenue streams.
Source: Authors: Christian Graf and Camille Goossens, Bain & Co, May 15, 2024
