So you have communicated your sustainability targets to the market – but how can you now ensure that you can steer your balance sheet towards those targets?
These goals now include a range of sustainability and climate-related ambitions (such as net zero and green funding targets) alongside the more traditional commitments to stakeholders such as shareholders, clients and staff members. Therefore, in order to bridge the gap between goals and behaviours, incentives for the Front Office must be changed to accommodate the additional sustainability targets.
Limit frameworks, capital attribution and transfer pricing are some of the potential approaches to incentivise the Front Office and in this video, we explore the mechanics of these and discuss the pros and cons, bringing perspectives from the 1st line of defence and the 2nd line of defence.
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