Barriers and enablers to sustainable finance: A case study of home loans in an Australian retail bank

Large financial institutions are inextricably linked to the climate risks and opportunities affecting their customers and have the potential to stimulate action on climate change though their lending decisions and policies. Ensuring that the prices of assets, including residential property, reflect climate risks is essential in averting the systemic risk climate change poses to financial stability. By undertaking a case study of a major Australian bank through interviews and focus groups with twenty-six participants, we identify factors influencing climate-related decisions affecting home loans and draw together a framework of barriers and enablers building on prior literature. The framework's six categories are economic market failure, economic non-market failure, political-institutional, socio-cultural, behavioural and organisational, with more specific factors within each category. Interdependencies and relationships between factors mean they cannot be perceived or addressed in isolation. Further theorising of the stages of decision-making within the case bank reflect a need for proactive, comprehensive action embedded in core value creating processes and internal governance, that interact with and are deeply connected to the broader society and environment in which the bank operates