Reflections on the climate - interview with Richard Winder Head of Sustainability Handelsbanken UK

Why is the climate issue important to you??

The climate issue is critical to everyone, though some may not yet have fully cottoned on. The Paris commitment is for worldwide net zero by 2050, but the challenges of a warming planet are with us already today. Floods, storms and heatwaves are happening ever more often and severely, in the UK as elsewhere. But these are only the first faint strains of the changes to come. Even if we miraculously cut our emissions to zero overnight, an amount of additional heating – and therefore worsening conditions for life – is already baked in. But if we can keep overall warming to within 1.5 degrees, then the higher sea levels, more severe weather and changes to habitat should at least remain manageable. Get beyond 2 degrees and we’re likely to set off a series of critical tipping points, resulting in uncontrollable deterioration.

What is the biggest challenge you encounter in your job when it comes to pushing the climate issue?

At the macro level, most people I speak with seem to get the challenge and the urgency of response. However, complexity, cost and short-term priorities can crowd out action. This goes for our customers too. It’s hard to keep in view that we’re in a collective fight for our future way of life, when we’re struggling to prioritise a raft of new questions, investments and regulations, all aimed at helping win that fight. It’s what Mark Carney describes as “the tragedy of the horizon”: the threat, though existential, can seem far enough away to be unconnected to our decisions and actions today. That’s why I tend to frame the chances of success, and our contribution towards it, in terms of the changes we effect each year of the decade we’re already two years into.??

The target year, 2030, for the Paris Agreement, is approaching. How do you see your area/market in Handelsbanken best contributing to net zero transition more widely?

Although we’re not one of the biggest UK banks, we have a substantial share of the real estate market, especially commercial property. Emissions from buildings, including heating, account for around a third of greenhouse gases. Much of Britain’s property stock is poorly insulated, as any visiting Swede will tell you! And we rely heavily on natural gas for our heating. So our biggest contribution to net zero transition will be in supporting our property customers to make energy efficiency improvements and install replacement low-carbon heating systems, and to ensure that the Bank’s own estate is climate positive as soon as we can.?

What are the biggest opportunities for the bank and its customers that you see coming out of tackling the climate issue?

The climate experts advising the UK Government estimate property owners will have to invest an average ￡12 billion each year in energy efficiency measures from now till 2050, with much of this invested this decade to meet rising energy performance standards. Add to that market-wide investment in new low-carbon heating and cooling systems.?

The core financing opportunity for the Bank is therefore plain to see. However, over time, many customers will choose to make additional investments in a low-carbon future - such as electric vehicles, renewable power generation or nature-based solutions to remove emissions from the air - which we will also be ready to finance.???

From the customer’s perspective, acting to improve energy performance will result in lower long-term operating costs. More broadly, tackling climate action can only raise their stock with customers, employees, investors and other stakeholders, while reducing regulatory risks.??

Increasingly when we talk, as we do, about working with customers who share our core values, we’ll also be thinking about a shared commitment to reduce climate impact, on top of our familiar focus on being prudent and managing risks. This is by far the biggest challenge humankind has ever faced, one we are not bound to ‘succeed’ in, but we have the chance to improve the odds through our own decisions and actions.