EVENT COVERAGE: SAP VIRTUAL ROUNDTABLE
How financial firms can take climate action beyond CSR campaigns 52% of banks now view climate change as a key emerging risk in the next five years, higher than 37% in the previous year SAP outlines three strategic imperatives for managing the climate crisis.
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he worsening climate crisis is undoubtedly being felt across the globe. Sustainability drives are being thrown left and right by governments and businesses in every industry, even finance, to pitch in mitigating climate change. In a virtual roundtable, hosted by Asian Banking & Finance, SAP gave a closer look at how climate-related challenges hit financial institutions, as well as shared its expertise in managing climate risks with its technology and environmental, social, and governance (ESG) solutions. Hadi Wijaya, financial services industry leader, South East Asia, SAP, said that for the first time the top five global risks are all related to climate change. Hadi said that the growing concern amongst banks is evident as 52% now view climate change as a key emerging risk in the next five years, much higher than 37% in the previous year. Banks are also increasingly responding to demands around sustainability through corporate purposes. 90 ASIAN BANKING AND FINANCE | Q4 2021
For the first time, the top five global risks are all related to climate change
Managing Climate Risk In light of this, Hadi outlined three strategic imperatives for managing the climate crisis, identified by SAP – safeguarding the business from uncertainty, financing a green agenda, and focusing on the enablers. He explained the first one is concerned about managing the financial exposure and protecting and preserving their business value. The second look into ways in which financial institutions can tap into the opportunities in the green market; whilst the third is about building enablers, a key role of SAP. “As digital solution providers for close to 50 years, we’ve been running the most critical business processes across the supply chain and industries,” he said. “We enable them from the front-office operation, like in sales, marketing, customer experience, to middle-office, product management, and core banking, and also to the back-office operation like accounting, finance, risk, human resources, and procurement.” Over 16,000 financial services companies, run with SAP and 97% of
banks named in Forbes 2000 used the SAP in their system, as well. SAP uses a holistic strategy, which it calls the Intelligent Banking Enterprise, to advise its clients. The strategy seeks to help companies digitise and integrate cross-company business processes, and address complex challenges in business, social, and environment. It also provides a business technology platform for integration, innovation, and extensibility, and cloud infrastructure that allows banks to scale the system landscape. “So overall, this holistic strategy helps our banking customers not only to manage climate risk today, or in the next 10 years, but also to deal with a broader disruption in the industry,” Hadi said. Walking the talk But this is just one of SAP key roles, as he had highlighted, the company is not just an enabler, it is also an exemplar. He noted that SAP’s push towards sustainability started a decade ago, during which it launched greed cloud to power data centres, and zero waste initiatives amongst others. Andrew Chan, PwC’s South East Asia Consulting Services Sustainability & Climate Change leader, observed “We’re seeing commitments from businesses’ realisation that we need to take more of a lead on climate change and societal issues. And what we’ve seen in the region in particular, are paradigm shifts,” he said during the roundtable discussion. As a value integrator, PwC’s Sustainability practise helps organisations plan, source, deliver, finance and measure the wider impact of products and services. PwC uses a spectrum that scales the sustainability ambition of financial institutions in their ESG journey, beginning with sceptics, pragmatists, strategists and idealists.
