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People and MarketsCommentP&M Notebook

Greenwashing with people?

Industrial paint green background

Every organisation wants to show it's making a positive environmental impact. Creating ESG job titles is one way.

With COP26 taking place in Glasgow, everyone was even more keen than usual to burnish their environmentally friendly credentials, and the financial services industry was no exception. But accusations of greenwashing are never far away.

On the pages of GlobalCapital in the past week, one could read about the merger of Danish local government financing agency KommuneKredit's sustainable and funding teams into a single department and the creation of a new head of ESG role at alternative asset manager Hayfin. Last week, BNP Paribas announced the creation of a new low-carbon transition group with a staff of 250.

But the craze for creating vast ESG groups and dishing out new green titles left, right and centre has raised suspicions in some quarters.

"What they're doing is slightly greenwashing the team by hiring consultants or education or someone from outside the industry," said a recruiter who has worked on placements of ESG personnel at various levels of seniority. "It's sort of greenwashing with people, is the best way to describe it."

It's a serious accusation, and one that bankers are eager to avoid.

At least in debt capital markets, where green bonds are approaching one third of total issuance, there is plenty of work for ESG specialists to do to justify their positions, from structuring labelled bonds to tracking investors' ESG mandates.

“All these new things keep popping up, and we need to work with them in order to keep and increase our market share,” said a senior DCM banker in Frankfurt.

Welcome distraction

Even one of the most important climate conferences ever could not stop earnings season, though some banks might have been glad of the distractions taking place in Glasgow.

Credit Suisse took its third quarter earnings as an opportunity to announce that it is axing almost all of its prime brokerage businesses and simplifying the organisational structure of its investment bank.

The bank has survived another quarter of uncomfortable headlines about such things as the Mozambique "tuna bond" scandal, over which it settled with regulators in October.

The exit from prime services is, along with a thorough derisking elsewhere, one of the outcomes of the Archegos Capital affair that has been dogging the bank since March. An investigation into the Greensill Capital debacle is underway.

It's a shame, because the rest of Credit Suisse's investment bank had another solid quarter, growing revenues by 10% on the back of strong capital markets, advisory, securitized products and equity derivatives work.

The bankers that contributed to the upswing will no doubt be curious as to who their bosses will be from January, when the new simplified organisational structure comes into effect. The reoganisation will place the employees of the main investment banking division in the same team as the investment bankers in the Asia Pacific and Swiss universal bank divisions. "The new leadership tructure will be announced as we approach the implementation date," said the firm in its financial report.

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