By Natalia Abril Bonilla and Lisa van den Hoven*
AMSTERDAM | 12 May 2025 (IDN) — In 2025, it feels like we are in a period of declining optimism. As the recent World Economic Forum Global Risks Report set out, state-based armed conflict, extreme weather events, ‘fake news’ and falling trust – together with deepening societal and political polarization – are contributing to a volatile and uncertain landscape for the years ahead.
These worldwide trends not only represent threats to financial stability, with far-reaching consequences for society and the environment; they are deeply intertwined within the global economy. Unsustainable energy and material use creates the conditions that drive climate change and biodiversity loss. A rise in conflict and warfare is ramping up arms manufacturing and distribution. Meanwhile, technological innovation – particularly in AI and algorithmic systems, and the rapid spread of generative AI (Gen AI) – is accelerating the production and dissemination of misinformation and disinformation.
The key role of the financial sector
Financial institutions are a key enabler of economic activities across all sectors – including greenhouse gas-intensive industries, information and technology, or defense and arms manufacturing. By providing credit, payment services, investment and insurance cover, financial services organizations facilitate economic activity and can be involved with the positive and negative impacts that result from it. As such, the financial services sector is uniquely positioned to influence how the impacts of organizations unfold and plays a key role in addressing global risks.
For example, infrastructure projects funded by the financial sector can lead to the displacement of Indigenous Peoples and local communities, while supporting job creation and local economic development. By setting expectations, offering incentives and applying conditions – or choosing not to finance, invest, or insure certain activities – financial institutions can influence social and environmental outcomes of corporate activity.
Insurers can promote risk prevention and resilience. Investors can influence business practices through stewardship efforts – by engaging with the companies they invest in, participating in shareholder meetings, and voting on key company decisions. Banks can link financing terms to environmental and social outcomes.
Standards for understanding the impacts of financial services
Recognizing the unique position of financial services organizations, GRI launched the Sector Standards Project for Financial Services. GRI Sector Standards for Financial Services will provide a structured roadmap to identify, manage and communicate the sector’s most significant impacts on people and planet.
The three proposed new GRI Sector Standards – for banking, insurance and capital markets – include disclosures that focus on how organizations assess and address impacts through their business relationships. These disclosures provide context on portfolio-wide processes and policies, and ask organizations to outline how they assess and manage impacts, including actions such as engaging with institutional customers and investees, adjusting portfolio composition, and enabling remediation of impact.
Managing impacts to address global challenges
The sector standards for financial services also intend to include separate topics that address specific impacts, such as non-discrimination and equal opportunity, and conflict-affected and high-risk areas. This allows financial services organizations to assess their involvement with these topics and address them in greater detail.
Impacts related to non-discrimination may intersect with emerging concerns around misinformation and disinformation – especially in the context of AI and Gen AI technologies. Financial institutions that provide capital to AI and Gen AI technology firms can identify information-related impacts and risks as significant to their portfolios, and use their leverage to promote ethical AI governance. This may include encouraging robust oversight frameworks, transparency policies, and mechanisms for remedying harms caused by algorithmic bias or misleading content.
Similarly, financial services organizations with connections in their portfolios to conflict-related impacts – for example, investments in sectors that extract or source materials from conflict-prone areas, or in the defense sector when investees export weapons to those areas – can incorporate conflict sensitivity into their decision-making. This includes using tools such as corruption indices and lists of business activities linked to international humanitarian law violations.
Shaping finance for a sustainable future
No single sector can solve the world’s most pressing challenges. However, by understanding and taking responsibility for their impacts, every sector can respond to global risks. By incorporating impact and embedding due diligence into decision-making, and influencing institutional customers and investees to adopt more responsible business practices, financial institutions can mitigate significant negative impacts. This includes those that give rise to global risks and direct capital toward activities that contribute to positive impacts, for the benefit of people and planet.
GRI’s Sector Standards streamline reporting, providing a fast-track for companies with shared common activities to focus on the impacts on the economy, environment and society that matter most in their sector. Supporting internationally relevant sustainability reporting, the GRI Sector Standards for Financial Services will support any company involved in banking, insurance or capital markets to assess its impacts, in a comparable and comprehensive way.
Under the project, the three new draft sustainability reporting standards are currently open for public comment. All stakeholders in the sector are encouraged to submit feedback on the exposure drafts until 31 May, to help shape the development of these new Standards that will focus attention on the crucial sustainability role of financial institutions.
*ABOUT THE AUTHORS
Lisa van den Hoven is a manager in the GRI Sector Standards Program, where she has been working on the Financial Services Sector Standards since June 2023. Lisa has a background in sustainability standards and assurance, previously working at the Rainforest Alliance. She holds a master’s degree in Intercultural Communication from the University of Utrecht.
Natalia Abril Bonilla is a senior standards officer in the GRI Sector Standards Program, where she has been working on the Financial Services Sector Standards. Natalia has a background in social and environmental impact research in the finance, energy, coal, and agriculture sectors. She holds a master’s degree in development studies, majoring in Social Policy for Development, from the International Institute of Social Studies, Erasmus University.
Lisa and Natalia have facilitated the work and discussions of the banking, capital markets, and insurance technical committees, whose expert input has informed the development of these draft Sector Standards.
ABOUT GRI
Global Reporting Initiative (GRI) is the is the independent nonprofit organization that is the architect of the common global language to assess and report on environmental, social and economic impacts. GRI provides standards, tools and training that empower organizations of all sizes to create sustainable, long-term value and unlock positive change in the world.
For over 25 years, GRI has led a global multi-stakeholder process to develop and refine rigorous yet practical approaches to sustainability reporting, which meet the needs of all stakeholders. The GRI Standards, the world’s most widely-used sustainability reporting framework, provide the building blocks for transparent reporting on impacts.
MEDIA CONTACT
Maru Alurralde, GRI Senior Communications Officer
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