A new study shows that the average percentage of banks developing a responsible product offering is now 82%, an increase from 47% last year.

The research from international audit, tax and advisory firm Mazars also reveals that banks that foster a culture of sustainability and have updated their governance structures accordingly is up by 51%.

Mazars also noted a similar increase (45%) in the percentage of banks that align their disclosures with Environmental, Social, and Corporate Governance (ESG) reporting standards.

But it added that there are clear lags in areas such as embedding ESG and climate criteria into risk management frameworks and implementing strategies for sustainability.

A total of 37 banks based in Europe, Africa, the Americas and Asia-Pacific were assessed to identify best practice and trends in their management of climate change risk and broader social and governance issues for the study. 

Mark Kennedy, Managing Partner at Mazars in Ireland, said the study provides welcome evidence that banks are taking steps to set and achieve internal sustainability targets, and to address the market need for responsible products. 

"The finding that 78% have launched Green Bond programmes is very encouraging, but the lower number of customer-facing products (32%) suggests an opportunity for Irish and European banks to differentiate in this space and meet a market need," Mr Kennedy said.

Liam McKenna, Consulting Partner at Mazars in Ireland, said that it is clear banks are increasingly committed to making their practices more sustainable, and this has led to progress since its first study. 

He said that while the findings are encouraging, they also reveal the work that remains to be done. 

"Banks need to fully implement relevant practices, particularly in climate risk management and disclosures, if they are to meet sustainability objectives. One way of doing this is to improve methodologies and better quantify incurred climate-related impacts in their reporting," Mr McKenna said. 

"Positive developments in this area could allow banks to fully play their role in shaping a more sustainable future for the global economy," he added.