With an extensive background in market analysis and international business trends, Priya Jaiswal has become a recognized authority in the world of sustainable finance. As major financial institutions recalibrate their strategies in response to the climate crisis, she provides critical insights into the complex mechanics of transitioning trillions of dollars toward a low-carbon economy. This conversation explores the deliberate strategies behind one of the most significant portfolio shifts in modern banking, delving into the rebalancing of energy investments, the rationale behind specific sustainable financing policies, and the ambitious roadmap toward a net-zero future.
Exceeding the 2025 low-carbon investment target by over $60 billion is a significant achievement. Could you walk me through the key strategies and client partnerships that enabled this success, and what specific metrics you tracked to stay ahead of your goal?
It was a truly monumental effort that culminated in committing over $299 billion to the low-carbon transition, far surpassing our initial $237 billion goal. The success wasn’t due to a single initiative but a deeply integrated strategy. The core of our approach was proactive client partnership. We didn’t just wait for green projects to come to us; we actively worked with clients across the globe to identify and structure their transition projects. It was about showing them a clear financial path forward, whether they were in renewable energy or other sectors shifting their models. Internally, we tracked our progress relentlessly. We had clear targets for our credit exposure to low-carbon energy, which created a powerful sense of momentum and accountability across the entire organization.
Your energy portfolio has seen a dramatic shift, with low-carbon exposure jumping from 54% to 82% in just three years. Can you describe the practical steps involved in rebalancing these investments and discuss the biggest challenges you faced when phasing down fossil fuel financing?
That shift from 54% in 2022 to 82% by last September represents a very deliberate and rapid reallocation of capital. The practical steps were two-fold: progressively reducing our financial pipelines to polluting sectors while simultaneously ramping up our support for their more sustainable alternatives. It’s like carefully turning down one tap while opening another one wider. The biggest challenge is always managing the transition. We have long-standing relationships with clients in traditional energy sectors, and our goal is to support their evolution, not abandon them. This requires nuanced conversations and a commitment to financing their credible transition plans, even as we implement stricter policies, like stopping direct financing for new oil and gas fields, a policy we’ve had since 2016.
Your definition of low-carbon energy includes both renewables and nuclear. Could you elaborate on the bank’s rationale for including nuclear energy in this strategy and share how the $299 billion investment was allocated between these different low-carbon technologies?
Our definition is pragmatic and science-based. We classify “low-carbon” as any energy source that produces little to no greenhouse gases during generation. This naturally includes both renewables and nuclear energy. The rationale is that achieving net-zero requires a diverse and stable energy mix, and nuclear provides a powerful, consistent source of carbon-free baseload power that complements the intermittent nature of some renewables. While the overarching $299 billion commitment supports the full spectrum of these technologies, the strategy focuses on the outcome—decarbonization—rather than prescribing a specific ratio. The allocation is driven by our clients’ projects and the opportunities available in different regions to build a resilient, low-carbon energy system.
In late 2024, your asset management arm stopped investing in new bonds from oil and gas exploration companies. What has been the tangible impact of this policy on your portfolio, and how did you manage conversations with clients in diversified energy sectors during this transition?
That decision was a critical step in aligning our asset management activities with the group’s overarching climate strategy. The tangible impact has been a clear and measurable reduction in our exposure to fossil fuel expansion, which strengthens the green credentials of our portfolios and sends a powerful signal to the market. When we communicated this change, especially to diversified energy clients, the key was clarity and consistency. We explained that this was not a sudden move but an evolution of our policy, rooted in our commitment to an eventual full exit from fossil fuels. The focus was on the long-term transition, emphasizing that we remain committed to financing their broader business and their journey toward more sustainable energy production.
Looking toward 2030, you have goals to slash financing for oil extraction by 80%. What is the roadmap for achieving such a steep reduction while supporting your clients’ transitions, and what are the primary economic or geopolitical risks that could complicate this plan?
The roadmap to an 80% reduction is built on the strong foundation of policies we’ve already implemented. We are not starting from scratch. By ceasing financing for new oil and gas fields and consistently reducing our overall exposure, we’ve created a clear downward trajectory. The next phase involves working even more closely with clients on their decarbonization pathways. This isn’t just about restriction; it’s about transformation. The primary risks are, without a doubt, geopolitical instability and sudden economic shocks. A global energy crisis, for example, could create immense pressure to revert to traditional energy sources for security reasons, potentially slowing the transition. Navigating this requires us to remain firm in our long-term goals while being agile enough to support our clients and economies through short-term volatility.
What is your forecast for the future of sustainable finance?
I believe we are past the tipping point. Sustainable finance is no longer a niche or a “nice-to-have”; it has become the central nervous system of the global financial industry. The forecast is for deeper integration, moving beyond simple exclusion policies to more sophisticated and impactful strategies that actively finance the transition of entire industries. We will see a surge in innovation around new financial instruments, more granular data to measure impact, and an intense focus on financing adaptation and resilience, not just mitigation. The pressure from regulators, investors, and society will only intensify, making a robust and authentic sustainable finance strategy a prerequisite for survival and success in the banking sector.
