ESG and Diversity in Banking Transformation: From Intention to Action

The New Imperative: ESG and DEI as Catalysts for Banking Transformation

Environmental, social, and governance (ESG) considerations—and the closely linked priorities of diversity, equity, and inclusion (DEI)—are no longer peripheral concerns for banks. They have become central to the digital transformation agenda, shaping how banks compete, innovate, and build trust with customers, employees, and regulators. Yet, as banks across the globe accelerate their digital journeys, a persistent gap remains between intention and action on ESG and DEI. Bridging this gap is now a defining challenge—and opportunity—for the industry.

The Pressure to Perform: Why ESG and DEI Matter More Than Ever

Banks face mounting pressure from all sides: customers demanding responsible products, employees seeking purpose-driven workplaces, investors scrutinizing sustainability, and regulators raising the bar on transparency and accountability. According to recent global benchmark studies, more than 60% of banking leaders feel significant pressure to address ESG risks, and a similar proportion cite ESG as a key driver of their digital transformation plans. In Southeast Asia, 65% of banks say ESG is a primary transformation driver; in France, 50% cite ESG and sustainability as their top priority for the next three years.

DEI is also rising up the agenda, with commitments highest in Southeast Asia (42%) and Australia (36%), but lagging in the U.S. (22%) and France (37%). Banks recognize that diverse teams and inclusive cultures are not just ethical imperatives—they are critical to innovation, customer understanding, and long-term competitiveness.

The Say-Do Gap: From Aspiration to Execution

Despite strong intentions, most banks are still early in their ESG and DEI journeys. Only 31% of banks globally have implemented ESG sponsorship and oversight at the board level, and just 35% have formal DEI commitments. Many banks lack the data, processes, and measurement frameworks needed to turn ESG and DEI ambitions into tangible outcomes. For example, 44% of U.S. banks and 47% of U.K. banks admit they lack the ability to properly assess their ESG performance. This gap between what banks say and what they do is a growing source of risk—and a missed opportunity for differentiation.

Regional Leaders and Local Nuances

The pace and focus of ESG and DEI integration vary widely by region:

Southeast Asia leads in both ESG and DEI, with 65% of banks citing ESG as a transformation driver and 42% making DEI commitments. Community engagement and financial inclusion are central to their strategies.
France and Australia are also ESG front-runners, with 50% and 57% respectively prioritizing sustainability. French banks, in particular, are investing in community engagement and new distribution channels to reach underserved segments.
Germany stands out for DEI, with 58% of banks making formal commitments.
The U.S. and U.K. are making progress, but DEI commitments remain lower (22% and 32%, respectively), and many banks struggle to move beyond compliance to measurable impact.

ESG and DEI as Differentiators in a Competitive Market

Banks that embed ESG and DEI into their digital transformation strategies are already seeing benefits:

Competitive Advantage: Over half of banks in Southeast Asia and France believe their ESG strategy gives them a competitive edge. Globally, 51% of U.S. banks and 63% of U.K. banks say the same.
Customer Trust and Loyalty: Community engagement, financial literacy initiatives, and inclusive product design are helping banks build deeper relationships with diverse customer segments.
Talent Attraction and Retention: Banks with strong DEI cultures are better positioned to attract and retain top talent, a critical differentiator as digital skills become scarcer.

Practical Steps: Embedding ESG and DEI in Banking Transformation

To move from intention to action, banks should focus on five practical steps:

Establish Board-Level Sponsorship and Accountability: Elevate ESG and DEI to the highest levels of governance. Only 31% of banks have done so—this is a clear area for improvement.
Invest in Data, Measurement, and Transparency: Develop robust frameworks to track ESG and DEI performance, set clear targets, and report progress to stakeholders. This is essential for credibility and regulatory compliance.
Integrate ESG and DEI into Product and Service Innovation: Use customer data to identify underserved segments, design inclusive products, and support sustainable finance initiatives. Community engagement and financial literacy programs are proven levers.
Build Diverse, Agile Teams: Prioritize talent development, upskilling, and inclusive leadership. Transformation leaders invest as much in people and culture as they do in technology.
Leverage Technology for Impact: Cloud, AI, and analytics can help banks measure ESG risks, personalize customer experiences, and identify bias or gaps in service delivery.

The Path Forward: From Compliance to Leadership

The future of banking belongs to those who act boldly on ESG and DEI. Regional leaders are showing what’s possible, but the industry as a whole must accelerate from compliance-driven box-ticking to genuine, measurable impact. As ESG and DEI become key differentiators in competitive banking markets, the winners will be those who close the say-do gap—embedding these priorities into every facet of their digital transformation agenda.

At Publicis Sapient, we partner with banks worldwide to help them move from aspiration to action, combining global best practices with local expertise. The journey is complex, but the rewards—for customers, employees, shareholders, and society—are profound. Now is the time to lead.