Two faces of sustainable banking. The bank’s significant role in financing sustainability

As the global focus on sustainability grows and the drive towards net-zero emissions intensifies, financial institutions are under increasing pressure to align their business strategies with both climate and development objectives. However, there is still a lack of systematic, empirically informed research on how banks’ internal practices and external financing activities jointly contribute to sustainable development. The aim of this paper is to analyse the dual role of banks as sustainable organisations and financial intermediaries in facilitating their clients’ transition, and to identify the main challenges and opportunities associated with this role. The analysis was conducted based on a comprehensive literature review of academic research, supplemented by targeted analyses of policy reports and case studies from international initiatives such as UNEP FI, EBRD, CPI, and EBF. The aim is to derive an integrated conceptual framework for sustainable banking. The findings show that while banks are increasingly integrating ESG standards into their strategies, risk management, product design, climate risk analytics, client transition support, and data availability remain key bottlenecks. This paper makes a valuable contribution to the literature on sustainable banking by clarifying the concept of banks’ dual contribution to sustainable development and by proposing a structured set of challenges and opportunities to inform future empirical research and supervisory practice.