German sustainable bank GLS grows in crisis year, calls for restructuring of financial system
The German sustainable bank GLS has grown in 2020, defying challenges caused by the coronavirus pandemic and spurring calls for a social-ecological restructuring of the financial system, newspaper Frankfurter Rundschau reports. The bank recorded a profit of 9.5 million euros in the past year, up from 5.4 million euros in 2019. It also increased the number of customers significantly, from 38,000 to 282,000, the paper writes. During a presentation of GLS’ 2020 balance sheet on Monday, the head of the bank, Thomas Jorberg, said the GLS bank is less susceptible to crises because it invests in “stable” sectors that satisfy people’s “basic needs.” In 2020, the bank invested its clients’ deposits in renewable energies (30.1%), affordable housing (26.3%), social affairs and health (15.9%) and other sustainable economic sectors, Frankfurter Rundschau writes. Jorberg argued that the current financial system gives too little consideration to the threats of climate change and biodiversity collapse despite their high costs, which he put at 20 trillion dollars worldwide. He therefore called for a social-ecological approach to finance and banking. "The bank of tomorrow must use money for nature and people,” Jorberg said.
In September 2020, a survey conducted by the Association of German Banks (Bankenverband) found that the vast majority of German banks (89%) expect climate change and the political reaction to slow it to have a major impact on their business in the next ten years. About half of the banks said they already used voluntary sustainability standards to prepare their workflows for tighter regulation. German banks are eager to avoid tighter national regulation in the context of a push by the government to bring green and sustainable finance in the county to scale and hope for a comprehensive EU rulebook. The European Commission’s forthcoming climate taxonomy, set to be enter effect in 2022, could become the world’s first unitary system for classifying the sustainability of investments, researchers have said.