Sarah Lalor, General Manager ESG and Sustainable Finance at Commonwealth Bank Australia (CBA) explains the bank’s multi-pronged approach to supporting businesses at every stage of their sustainability journeys. It’s a wonderful case study of how one organisation can multiply its ESG impact by influencing the organisations it supports.

In conversation with Ashurst’s Elena Lambros, Sarah takes us on a whistle-stop tour of CBA’s strategy to assist businesses of all sizes. They discuss how SMEs and mid-market businesses are shifting from what Sarah describes as a “curiosity mindset” to an “action mindset”. This is being driven through a combination of:

• Savings including lower energy bills
• Enablers such as CBA’s asset finance for energy-efficient equipment, solar and EVs for businesses of all sizes, Green Loans and Sustainability-Linked Loans for larger businesses
• Expectations from investors, and procurement requirements from larger businesses that are subject to new mandatory climate-related disclosures.

While acknowledging the challenge for small businesses to devote time to ESG strategy, Sarah emphasises the proven commercial rewards of doing so. She also explains how Sustainability-Linked Loans work and she illustrates the value of the ‘S’ in ESG (e.g. social outcomes such as employee wellbeing).

Sarah and Elena highlight some industries that are embracing sustainable finance, such as hospitality, retirement living and aged care, and commercial property. And they welcome the sustainable finance taxonomy which promises to bring greater consistency and confidence in the market.

They also emphasise the commercial benefits for small businesses that don’t wait, but instead seize the initiative. As Sarah points out, SMEs that go beyond compliance and really embrace ESG now can access new markets, win more contracts and tenders, and be more attractive propositions for customers and potential employees alike.

Listen to more episodes in the Game Changers mini-series – featuring an array of thought-provoking guests – by subscribing to ESG Matters @ Ashurst on Apple Podcasts, Spotify or wherever you get your podcasts.

The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Listeners should take legal advice before applying it to specific issues or transactions.