Late last year, we caught up with Jose Luis Muñoz Dominguez to discuss his dual role at Banorte as Executive Director Sustainability and Investor Relations in the latest on our series of interviews with a range of banking professionals. Banorte is a full retail bank and the second-largest financial group in Mexico in terms of loan portfolio.
Tell us about your role. What does a typical day look like for you?
Typically, my day starts with an early morning call for one of the working groups and steering groups we are involved in at the Net-Zero Banking Alliance (NZBA), Principles for Responsible Banking (PRB), or the Taskforce on Nature-related Financial Disclosures.
The sustainability team heads up five working groups in the bank, so we usually have at least one meeting per day on a sustainability-related project. For example, we issued a sustainable bond earlier this year, and in the related working group we follow up to see how the proceeds of the bond are being allocated, what percentage is already committed, and what the next steps are for the different corporate and commercial teams in the bank to identify opportunities and fund them.
“As sustainability is integrated into the strategy of the group, increasing numbers of investors are asking about progress on our decarbonisation targets and other ESG-related metrics.”
I typically also have one or two meetings with investors. Here I bring the sustainability and investor relations sides of my role together in explaining the financial and the non-financial aspects of our daily activities and vision to investors, many of whom are from the United States, the United Kingdom, and other parts of the world. As sustainability is integrated into the strategy of the group, increasing numbers of investors are asking about progress on our decarbonisation targets and other ESG-related metrics.
What do you love about your job, and what frustrates you?
I love that it’s easy to see tangible progress across different projects — that’s very, very encouraging. I also love that every day I get to interact with different people in different areas of the bank on subjects that range from product development and climate risk, to working to integrate climate-related information from our clients into existing IT systems.
One of the challenges I face is the uneven adoption of ESG practices among our client base. Some corporate clients have a clear understanding of what they need to do in terms of ESG, but when we engage with smaller clients, even in the same industry, we have to completely switch gears. SME clients have lower incentives to adopt ESG practices, so progress is significantly slower.
What climate-related goals do you have? Which KPIs are most useful to measure success?
The most evident or tangible climate-related goals are decarbonisation targets for our financed emissions. They drive a lot of conversations and projects inside the bank. Many things are being done so that our corporate clients and other customers can move ahead and make progress.
Other than that, KPIs can vary by sector and product. For instance, Banorte launched a green mortgage product in July. My team is involved in the cross-department working group that supported the development and launch of the product and is also helping monitor the percentage of mortgages that have been placed. This is a good benchmark to estimate how other sustainable products may evolve.
What is your biggest recent climate-related professional achievement?
Establishing the governance structure that we have now was a great achievement. Having the working groups up and running and having the management buy-in to incorporate different departments into those working groups is what gives us the ability to execute all our sustainability-related projects.
What challenges did you face in achieving it?
Getting buy-in took time. Before we had the working groups, we had a sustainability committee that met three times a year. As more members of senior management got involved and began to better understand the most important sustainability-related issues, we got management buy-in to push bigger-scale projects.
Commitments like the ones we made with NZBA helped increase the awareness of senior management and eventually bring these issues to the attention of the board. Now, we regularly update the board on ESG-related initiatives. Having the support of the board makes things a lot easier in terms of accelerating the execution of projects.
What advice do you have for others attempting the same?
I like to say that the G is the last letter in ESG, but it should come first. If you have the governance in place, senior management on board, and the infrastructure in place to execute projects, everything is easier. So, establish the G first and then deliver on the E and the S: your environmental and social commitments.
“I like to say that the G is the last letter in ESG, but it should come first. If you have the governance in place, senior management on board, and the infrastructure in place to execute projects, everything is easier.”
What climate-related issues are front of mind for you right now?
There are two key issues. One is client engagement and how we’re helping our clients in the most carbon-intensive sectors to start their journey and finance projects that help reduce the costs and emissions of their operations. There is growing interest from our commercial teams in learning how they can identify opportunities and in having advice and support when a client comes to them wanting to know whether we can help with a green or social project. There is a more consistent flow of opportunities, and we reorganised our sustainability team earlier this year to support our commercial teams to take advantage of this.
The second issue is not related to climate alone. Nature and biodiversity are very relevant for us in Mexico. The country is rich in biodiversity, and as a bank, we want to be clear as we move forward that we will play a role in preserving those ecosystems. We have some water-stressed areas in the country that we also want to be very aware of. So that’s also top of mind for the organisation going forward.
“There is a more consistent flow of opportunities, and we reorganised our sustainability team earlier this year to support our commercial teams to take advantage of this.“
What one thing do you wish your colleagues in other departments at the bank, or your clients understood better about your role in taking climate action?
I think people in different areas inside or outside of the bank should be aware that making progress on sustainability is not just a nice thing to do. Everyone that’s working in finance and providing resources for companies should be considering the positive impact those resources can have for their clients and for society.
Sometimes, some people think it’s an optional thing to be a socially responsible bank, but I think it’s a must. We need to work towards social and climate-positive projects with all our customers. That’s the one thing everyone must understand.
What inspires you to work on climate? How do you think about your contribution?
What inspires me is seeing different projects progress. A couple of years ago, a green bond seemed far away or somewhat unachievable, and now we have one. We have launched green products in our portfolio that people are starting to adopt and grow. It shows that there is a way forward and that keeps me and my team going and saying, “Let’s go for the next thing we can do.”
The Net-Zero Banking Alliance (NZBA) is a group of leading global banks committed to financing ambitious climate action to transition the real economy to net-zero greenhouse gas emissions by 2050. It is the climate accelerator for UNEP FI’s Principles for Responsible Banking (PRB). Is your bank interested in joining? Find out more here.
Disclaimer: The views and opinions expressed here are those of interviewees and do not necessarily represent the views or opinions of their employer companies and affiliate companies, NZBA, PRB, or UNEP FI.