58% of Banking CEOs Predict Major Returns on ESG Initiatives

58% of CEOs say yes—predicting significant returns within 3-5 years

ESG investments are increasingly viewed as drivers of profitability by banking executives

• Most banking CEOs are optimistic about ESG returns within the next three to five years.

• Strategic ESG investments align profitability with purpose-driven banking.

• CEOs anticipate ESG will reshape industry dynamics and competitive positioning.

The KPMG 2024 Banking CEO Outlook reveals that 58% of banking CEOs expect significant financial returns on environmental, social, and governance (ESG) investments within three to five years. This sentiment marks a growing acknowledgement of ESG as a strategic lever for both growth and sustainability in the sector.

This is important because ESG is no longer just a regulatory requirement or a reputational consideration—it is now positioned as a key driver of profitability. The shift reflects changing stakeholder expectations and investor preferences and a recognition of the material risks associated with neglecting ESG principles.

Technical Focus

The financial sector is increasingly integrating ESG metrics into core strategies. Global ESG investment topped $40 trillion in 2022, and banks are significant players, financing sustainable projects and adopting green operations. For banking CEOs, aligning with ESG trends is essential to tap into the expanding market of ESG-conscious consumers and investors, projected to grow at a compound annual rate of 20% through 2030.

Banking CEOs are doubling down on efforts to integrate ESG into their strategies. KPMG notes that many leaders see these initiatives as essential for long-term resilience, competitive differentiation, and regulatory compliance. One banking executive highlighted that “ESG investment is no longer optional—it’s foundational to the future of banking.”

These findings underscore how ESG is becoming a defining element of banking. As the sector evolves, institutions successfully leveraging ESG are expected to not only meet compliance benchmarks but also unlock new revenue streams, reinforcing banking's dual role as both profit-driven and socially responsible.