Mainstreaming Sustainability in Financial Institutions: Lessons from ASFI’s Leadership Working Group

In 2024, the ASFI Leadership Working Group convened leaders from across the financial sector to address a vital question: how can we embed and mainstream sustainability within financial institutions? Over four in-person workshops, the group shared insights on barriers to advancing sustainability objectives, discussed key stakeholders and how to work with them, and identified actionable solutions to accelerate change.

The Journey: Key Focus Areas

• Identifying barriers to mainstreaming sustainability within financial institutions.

• Exploring ways of working to break silos and drive sustainability outcomes.

• Building internal capability and influence to embed sustainability within organisations.

• Forming external coalitions of support to tackle systemic challenges.

Key Takeaways from the Year

1. Sustainability Requires a Whole-of-Organisation Effort
Sustainability is not just the responsibility of dedicated teams. It must permeate all levels of an organisation, with accountability embedded into KPIs and business strategies.

2. Communication is Key
Tailoring the "why" to resonate with different stakeholders—both internal and external—is crucial for driving buy-in and understanding.

3. Focusing on Opportunities
Sustainability is often approached with a defensive lens focused on compliance and risk mitigation. Leaders must embrace opportunities for value creation to unlock its full potential.

4. Leadership Drives Progress
Change starts at the top. Leadership commitment is essential to secure buy-in, build capability, and sustain momentum.

5. The Power of Collaboration
Advancing sustainability requires multistakeholder collaboration—across teams, industries, and external partners. Knowledge-sharing and collective action are critical for addressing shared challenges.

What Needs to Happen Next?

From our discussions, several actionable solutions emerged:

• Break Down Silos: Restructure teams to enable cross-functional collaboration and align sustainability efforts with business goals.

• Build Capability: Offer secondments, create sustainability champions, and embed sustainability into training programs to increase organisational exposure and expertise.

• Form Coalitions: Build partnerships with key stakeholders such as investors, regulators, clients, and communities to advance shared sustainability goals.

• Ensure Clear Accountability: Integrate sustainability into individual KPIs and governance structures to ensure measurable progress.

• Focus on the Bigger Picture: The sustainability landscape is evolving rapidly. Maintaining focus on the big picture ensures organisations stay the course.

Moving Forward

The financial sector has a unique role to play in enabling a more sustainable, inclusive, and resilient economy. By addressing barriers, embracing opportunities, and fostering collaboration, we can make sustainability the norm—not the exception—across financial institutions.

ASFI remains committed to supporting and encouraging leadership from, and building capability within, financial institutions on sustainable finance. We do this by sharing insights, fostering collaboration, and championing ambitious action.

Learn more about our Leadership work at https://www.asfi.org.au/leadership or reach out to Natalie or Oliver.