Firms who don't take ESG seriously won't survive warns AIB boss Hunt

The chief executive of AIB has said he thinks the greatest challenge facing this generation is climate change and companies that don't take it seriously won’t be around in a decade’s time.

Addressing a webinar organised by social change think tank, TASC, Colin Hunt said becoming sustainable make sound commercial sense for firms in the medium-term.

"I have a deep-seated hatred of climate denial," he said.

"I believe that the greatest challenge facing this generation is not Covid-19, the greatest challenge is the future of climate change, the greatest challenge is global warming, how we arrest it and how we ultimately cap it, and hopefully reverse it."

The AIB boss said the issue is "existential" and is about the future of the species and the inhabitability of this planet.

"This is the biggest challenge we will ever face as a generation," he said.

"And as things currently stand, we will be the first generation since the middle ages to hand over to our children and our grandchildren a world in a worse state of repair than it was handed to us. And shame on us."

"Now we have an opportunity to do something about that and that can’t be done by a bank or an individual or a country or a community."

Mr Hunt said he believes that we are not too far away from a point where you will see material reductions in investment in companies that aren’t taking this agenda seriously.

"Companies that don’t take this seriously won’t be around to talk about it in ten years’ time," he warned.

Mr Hunt said there are short-term financial costs involved in improving sustainability. But he said if you take a long-term perspective it is unquestionably good business for AIB.

"This makes sound medium-term commercial sense," he added.

"But equally what we are trying to do is put this at the top of businesses agenda and force others and encourage others to come with us on this path to a greener future."

Mr Hunt said the practice of so-called "greenwashing" is a concern because it undermines the reputation of the whole business sector.

He also said it can lead to some companies seeking to avoid attention on the topic for fear of being accused of "greenwashing".

He also revealed that there are industries that AIB will no longer lend to, such as extraction and fracking, and that the list will grow over time.

By 2030 some 70% of new lending at AIB will be green or transition lending, rising to 100% for all parts of the economy except agriculture by 2040 and all lending will reach that target by 2050, he claimed.

The AIB boss said the bank's commitment to sustainability means it will remain embedded in the communities it serves.

"Notwithstanding the fact that you are seeing massive moves towards digital, we still want to remain embedded in the communities we serve and we will do so," he stated.

"We will continue to have as strong and vibrant AIB physical presence on main streets of the towns and cities of this country."

However, he also said that it is inevitable that as the bank digitalises its internal processes, roles will change and that it will have fewer people working for it.

He added that although the bank’s headcount will increase due to recent business developments such as the acquisition of Ulster Bank’s commercial loan book, roles are changing and some of those that are being done today will not be done in the future.

The bank boss also said that AIB staff won’t be returning to the office five days a week, but will operate a hybrid model.

He added that the bank intends to follow the issuing of two green bonds in recent months with the issuing of social bonds, having published a social bond framework in the last few weeks.