Understanding the factors driving a bank to integrate sustainability in its Banking Business in a Market where Green Banking is a Novel Concept and not Mandatory: A Case Study of Standard Chartered Bank Zambia

Abstract

Standard Chartered Bank Zambia is the first and only bank in Zambia that has publicly declared its commitment to integrating sustainability its banking business.  The bank has embarked on adopting sustainable/green banking practices in a market where it is not mandatory for players in the banking sector to adopt sustainable/green banking practices in their banking business.  Regardless Zambia being a signatory to the Paris Agreement on Climate Change, the current regulatory frameworks and laws suggest a limitation in enforcing sustainable/green banking as there are no such legal provisions.  For instance, the Banking and Financial Services Act (2017) which gives the Bank of Zambia (the Central Bank) the mandate to oversee banking and non-banking financial institutions, does not have a provision to compel banks in Zambia to adopt or integrate sustainable/green banking practices.  In other words, as earlier mentioned, it is not mandatory for banks in Zambia to adopt sustainable banking practices.  In this respect, in the absence of a regulatory framework and laws to compel banks in Zambia to adopt sustainability in their banking business, this study embarked on understanding what is driving Standard Chartered Bank Zambia to integrate or adopt sustainability in its banking business.

On the basis that Standard Chartered Bank Zambia is the first and only bank in Zambia that has integrated sustainability in its business, this study has adopted a case study design taking Standard Chartered Bank Zambia as case to understand the factors driving the bank to integrate sustainability in its banking business in a market where green banking is a novel concept and not mandatory.  To collect data on the study objective, the study employed qualitative data collection methods that include the conduct of key informant interviews and document review. 

The study findings reveal that Standard Chartered Bank Zambia’s integration or adoption of sustainability in its banking business was largely driven by the parent bank’s strategic/policy shift to go green, which is consequently cascaded to subsidiary banks at country level.  The parent bank’s strategic/policy shift mainly reflects the bank’s response to pressure from the global community position on sustainability within the context of attaining net zero by 2050.  Additionally, Standard Chartered Bank's global vision of becoming the world's most sustainable and responsible bank, a vision shared and implemented by all its subsidiaries worldwide suggests the extent ethical obligation has played a role in the bank’s adoption of sustainable/green banking.