Managing Editor and Sustainability Editor, MIT Sloan Management Review
MIT Sloan Management Review
Massachusetts Institute of Technology
77 Massachusetts Avenue
Cambridge, MA 02139-4307
Definition of Responsible Investment Banking
Areas of Expertise
For more than 20 years now, Nina Kruschwitz is doing research as well as consulting and writing on ESG-topics.
Nina Kruschwitz has worked for MIT Sloan Management Review since the foundation of the sustainability and innovation research initiative, conducted in collaboration with the Boston Consulting Group, in 2009. She has been co-author or author of numerous reports, articles, blogs and interviews on the topic of sustainability. Prior to joining MIT SMR, she was the managing editor of the Fifth Discipline Fieldbook Project, and co-author of “The Necessary Revolution: How Individuals and Organizations Are Working Together to Create a Sustainable World (Doubleday, 2008)” with Peter Senge et al.
The debate about sustainable finance focuses mostly on responsible investment. Considerably less attention tends to be paid to the direct relationships between banks and their corporate clients. Some of these clients are associated with controversial business practices, sectors, projects, and/or countries that, in turn, are associated with detrimental environmental and social impacts. In the context of this article, environmental and social (E&S) risks are those risks that occur when investment banks engage with such clients. This article discusses five factors that put pressure on banks to address E&S risks more systematically. It makes the case that E&S issues harbor considerable potential for damage in the here and now, and that investment banks take a risk if they underestimate them.
Keywords: sustainable finance, sustainable banking, client relationships, corporate clients, controversies, controversial business practices, controversial sectors, controversial projects, controversial countries, environmental impacts, social impacts, human rights impacts, environmental risks, social risks, human rights risks, banks, investment banks
Co-authors: Olivier Jaeggi and Raul Manjarin