Standard Chartered is on a mission to become the world’s most sustainable and responsible bank – and Marisa Drew is at the forefront of that charge. Sustainable Future News spoke with Marisa to learn more about this ambition and how sustainability can reshape finance.
Drew is chief sustainability officer at Standard Chartered, having previously held the same title at Credit Suisse. She points out that while the titles are the same, the businesses were very different, geared towards wealth management and investment more than commercial banking.
Speaking with Sustainable Future News, Drew explains how privileged she feels at ‘stumbling’ into sustainability after a career as an investment banker, how to create greater purpose among the workforce, and the key roles financial services can play in creating a more sustainable society.
Read more: Marisa Drew, CSO, Standard Chartered: Sustainability as a way to reshape finance
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- Marisa’s history
- Moving on from Credit Suisse
- Current role & responsibilities
- Reasons for sustainable ambitions
- What customers & employees are saying
- Graduates demanding sustainability
- The importance of proactive leadership
- Dealing with Greenwashing
- Key sustainable issues for 2023
Tell us a bit about yourself and how you got into sustainability and ESG?
I’m currently the chief sustainability officer (CSO) at Standard Chartered Bank, and that is an inaugural role there. I’ve been in the sustainability arena since 2017, before that, was a career investment banking. I grew up in the capital markets world, raising money for early-stage high-growth businesses.
Throughout the course of my career, I’ve run all sorts of capital markets, businesses from equity debt, IPO businesses, leveraged finance, acquisition, finance, derivatives, and so on. Just before I entered the world of sustainability, I was running investment banking for Credit Suisse, for the EMEA region.
My journey in sustainability really began with a vision of my then-chief executive. It really wasn’t fully formed in his mind, the notion of sustainability and what it meant as a strategic matter for the bank. But he knew it was important, and he knew our clients needed help and advice. He got me to really try to understand what it is the clients were looking for, and build a business around it.
After spending almost 20 years at Credit Suisse, was it exciting to start something completely different?
In your career, you need to have a refresh every five years or so because I think at some point you plateau out, that can even be at the same organisation where your role changes. If you want to continue to grow yourself, but also be impactful, I do think a refresh is quite useful.
I feel incredibly privileged to have stumbled into the world of sustainability because I couldn’t have envisaged just how important this was going to be; how transformational, and how profound it is to be part of what I call the movement of reshaping the way we think about finance. Making it purposeful, deliberate, and very directed, at the same time as generating returns.
What is your main role, and what are your main responsibilities?
My role is really from the front to back in the organisation to drive sustainability. That means as an organisation, making it who we are and what we do, our strategy, our aspirations, but then also what we do for, and on behalf of, clients. How do we bring clients along in their sustainability journey? That’s my day job, my fundamental north star, if you want to put it in those terms – the quest to mobilise capital to solve some of the world’s most pressing challenges.
I’m bringing together three teams that previously existed in the bank that are driving our day-to-day activities. One team is our sustainable finance team, for the work we’re doing with clients, and that can be helping a company to raise money to invest in transforming its business model to a more sustainable one. That is particularly important in the high carbon-emitting industries. It could be capital raising – a lot of them are looking for good advice. They want to know best practices, and where there are technologies that exist to help them transform.
The other part of what I’m inheriting in terms of the teams is the ESG strategy or sustainability strategy teams. This really looks at us as a company – what can we be doing ourselves? Are we buying from sustainable sources? Are we really driving the sustainability agenda throughout our organisation and embedding it in everything we do? Part of that is our commitment to net zero. We as an organisation have committed to net zero by 2050, with 2030 interim targets. That’s a very complicated thing to execute.
You need to think about your own footprint, you need to think about your procurement service sources, but scope 3 emissions are the hardest piece because that means all the clients and business we’re dealing with need to be on that similar trajectory for us to be able to meet our ambitions.
Have these ambitions and goals come about through customer demand, employer demand, a top-down approach, or a mix of all?
It really is a mix of all three. I’m a classic kid at Wharton MBA, and in that classic wisdom, you typically thought of the private sector being beholden to one category of stakeholders, which was your shareholders. Today our stakeholder universe is much wider than that – of course, it’s your shareholders if you’re a public company, but it’s also your communities that you operate in. It’s your licence to operate – they give you that licence and if you’re not paying attention to their needs, wants and desires, there’s a miss.
I can tell you from 35 years of working in business in the private sector, there is no greater excitement you can have when your employees feel like they have a purpose-driven mission to what they do every day. It drives behaviour change, drives enthusiasm, it drives loyalty – and it makes you an employer of choice. Employees are huge stakeholders, they are our future, especially in a services business.
I would also point to NGOs (non-governmental organisations), as they can be very noisy stakeholders, but they challenge us and I think that’s a good, healthy thing. They not only can be the agitators for us to raise our game, but we’re increasingly finding they can be fantastic collaborative partners. They are keen to link arms, and many times they’ve got a great deal of expertise on the ground that we don’t have in the developing market. Those are experiences that we can learn from as we think about how to contextualise what they’re doing, and perhaps make it more sustainable because we can create financial products and instruments around that so that the capital actually flows in those directions.
Is there anything specifically that customers or employees are telling you regarding the importance of sustainability and their future decisions?
It depends on the nature or category of the customer. When we talk about clients, we’re talking about, in some cases, corporations who are big clients of our investment bank. I would say every industry is feeling the pressure from their own clients and stakeholders, and driving them towards more sustainable solutions. But in particular, the clients in high carbon-emitting sectors, feel particular pressure. They know they need to change, so the demand they have of us is ‘help me figure this out by showing me the pathways that are critical, helping me raise capital and giving me advice’.
Companies that are not on the journey to change I think will find themselves devoid of support, and probably devoid in the not-too-distant future of capital as well. If you want to ensure your own survival as a company, you need to be part of the journey – but a lot of companies don’t know how to operationalise that. So they look to us for that support and advice.
In our wealth business, people are investing their own money as individuals in sustainable solutions; and increasingly we’re seeing them ask us for sustainable investment products. That can range from big pools of their investment capital, all the way down to when they put their money in our bank, they want to know what their deposits are doing. So we’ve created a sustainable deposit programme, so they know when they’re putting their cash in the bank, that cash is actually going to something with a positive outcome. It’s reframing the entire discussion about how people think about not only their corporate funds, but also their personal ones.
Graduates are coming out of university looking for companies they want to work for. How important is it companies work towards tackling climate change in order to attract the top talent?
If I can share some perspectives, being of a certain age and vintage, 20 to 30 years ago when we were recruiting at the top schools in the world and looking to attract the best talent, the students didn’t ask those questions. They might ask you about investment banking, how many IPOs (initial public offering) you do, how many M&A (merger and acquisition) deals you do. Never a question that touched on the sustainability aspect. Today, when we’re recruiting the top talent, they’re asking us questions about ‘what are your ESG policies’? ‘Will you finance coal?’ ‘Are you using single-use plastics on your campuses?’
These deep questions are driven by, I think, the world that they’re inheriting. They want to be a part of change-making, and they certainly don’t want to be affiliated with organisations that don’t have that purpose to try to do better. I think this is just a fundamental shift in the psychology of what people want to see at the companies they work for.
How important is proactive leadership in establishing and driving key sustainability goals?
You hear these phrases, which sometimes might be somewhat trite. ‘Tone from the top’ is a classic phrase. It isn’t trite, it really matters. If your board and your chief executive say this is critically important, this is fundamental to the strategy of the bank, of this organisation, then it does drive it throughout. The more we exhibit leadership, and we’re clear in that purpose, the more the organisation can get behind it.
Purposeful leadership is absolutely critical. It’s not only critical for strategic direction, but it’s critical for attracting top talent, it’s critical for aligning yourselves with your client base, who are going to be in sync with your purpose and your mission. I do think companies in the long run that are very clear on that purpose and mission statement will be the companies that outperform.
A lot of sustainability is a long-term investment, and if you’re a public company, you’ve got short-term pressures. So how do you balance those things? You have a client in one place that’s doing one thing that may not be as sustainable as you’d like them to be; how do you manage that? Is it one of those things where you can bring the client along with you? Or do you have to make a hard decision? In some cases, I suspect these are the places where we will land. If a client says they don’t care, they’re just going to keep doing things the way they used to do them and that you don’t have any right to tell them what to do, well maybe we won’t be able to have a long-term continuing relationship with those clients.
What are the big red flags when it comes to greenwashing, and what can be done to stop bad actors?
Today there isn’t one universal definition of what is green and what isn’t. In the absence of that definition, then people self-define. My view is that ambiguity can create misalignment, if somebody is putting a green label on something just for a marketing exercise and there’s no substance behind it, that’s essentially mis-selling.
It’s telling somebody that something is green or impactful when there isn’t that delivery behind it or that honest performance of what that instrument is trying to achieve.
So how do you spot it? I think the best thing you can do is educate yourself. If you’re an investor, and you look underneath the bonnet, you say ‘what is that instrument communicating?’ How transparent is the decision-making for why somebody’s calling something green, sustainable, or impactful? If you don’t have a good answer, if there’s no substance there, if there isn’t a framework that guides you, then that might be a red flag to say ‘is this just a marketing exercise?’
The one thing I would also caution about is, I think generally speaking, most people are well-intentioned, but they miss in the execution. I always use the case of the electric vehicle industry. Half of my clients will tell you that EV is green, and half will say it’s not because of the supply chain in producing electric vehicles is still based on relatively unsustainable high carbon-emitting industries like mining, which often don’t have great social policies either.
It’s not my job to tell someone they’re right or wrong because that definition is in the eye of the beholder. But what I can do is say ‘here is why I’m calling this instrument or investment green.’ It is because, in one instance, I could be saying the end goal is to get to vehicle electrification; you can decide as the investor whether you agree with me or not.
Until there is some legislation on what green really is, the homework and the onus is on the individual. Make sure that you’re digging around and that the answer you’re getting aligns with your vision of what sustainability really is.
What do you feel are the key issues organisations will have to look for around corporate sustainability in 2023?
Some of the themes that are coming out are as we move beyond the basic understanding of CO2 emissions being the driving focus of climate change mitigation, and moving into an acknowledgement that it goes beyond that, methane emissions and biodiversity have a huge role to play in climate warming. These fragile ecosystems play a big role in taking the heat out of the atmosphere; our oceans, which are a very complex ecosystem, are fragile right now and under threat. They take about 25% of the carbon out of the atmosphere. We need to protect these things, as well as reduce carbon emissions; we have to make sure we’re protecting our biodiverse resources.
Another big theme is the idea of climate adaptation. Most of our focus had been on mitigation – reducing carbon emissions through vehicle electrification, or renewable energy. But we also have to start investing in the inevitability that climate change is here, it’s happening. If we just stopped everything, which is not practical, we are still going to have to live with a warming planet.
So we need to make investments in how we adapt to that new reality and that adaption can be anything from our real estate – we need to make it more structurally sound if you’re on the coastline, or we need to think differently about our food systems. Then we have to think about that contextually. If you’re a financial services firm, how do we raise capital and direct it towards the adaptation of biodiversity protection, in addition to CO2 focus?
