Corporates can elevate their sustainability dialogue with banks, but treasurers must respond with clarity and ambition.

For the banking community, sustainability is no longer a peripheral concern; it’s central to how lenders are expected to assess risk, allocate capital and build long-term relationships. Yet, recent ACT feedback suggests that corporate treasurers often remain passive in these conversations. This asymmetry risks missed opportunities and misalignment.

As regulators push banks to scrutinise client transition plans, treasurers are advised to engage proactively on climate topics to shape financing outcomes and reinforce their company’s credibility. This article explores why and how treasury teams can build such strategic sustainability dialogue with their banks, turning a one-way street into a two-way partnership.

Strategic, consistent dialogue on sustainability between corporate treasury teams and their relationship banks is now a business imperative. It directly influences the pricing, availability and structure of bank financing, as well as the credibility of a company’s transition story with lenders and investors.

UK and EU supervisors expect banks to embed sustainability across governance, strategy, risk management and disclosures. This includes demonstrating how client transition risks and opportunities are reflected in underwriting and portfolio decisions. In response, banks have invested heavily in internal capacity and processes to integrate sustainability into decision-making.

Our benchmarking study of 36 banks across Europe, Canada and Australia found that:

• 83% have board-level committees overseeing sustainability, with others embedding ESG into existing governance structures
• 86% have management-level committees, with strategy setting shared across CEOs, executive committees and boards
• 94% embed sustainability in leadership compensation, with more than half providing detailed schemes and KPIs — climate and gender balance being among the most common
• All banks have committed to net zero by 2050 and 95% have set intermediate sector-level targets
• Climate-scenario analysis is increasingly embedded into financial planning and stress-testing, with banks moving from top-down models to account-level granularity
• Nature and biodiversity are gaining traction, with all banks considering these factors in strategy and risk taxonomies.

These expectations flow into day-to-day credit work. The quality of treasury–bank dialogue can determine whether a bank is willing to onboard or continue a relationship, and on what terms. Credit committees now routinely ask whether a company’s transition plan is credible, financed and governed.

This includes targets, capital expenditure pathways, milestones and board accountability. Where corporates provide robust evidence, banks can progress transactions more quickly and offer more competitive pricing, longer tenors and fewer conditionalities.

Banks have professionalised their client engagement on sustainability. Our analysis shows:

• 86% of banks have published their own climate transition plans
• 61% have developed customer transition plan assessment tools, including sector questionnaires, readiness scorecards and classifications such as “net-zero aligned/aligning/lagging”.

This means that questions asked by one lender are increasingly echoed by peers. Any gaps identified are likely to recur unless addressed centrally. Treasury teams can reduce friction by treating sustainability engagement as a standing workstream, rather than an annual questionnaire. Engagement has also evolved beyond compliance. It’s now a strategic dialogue about value creation, resilience and long-term impact.

Banks offer a range of free resources to support this, including:

• Digital ESG assessment tools
• Webinars showcasing industry best practices
• Peer-to-peer roundtables and sustainability forums
• Insight reports translating regulatory trends into actionable guidance.

These channels help demystify sustainability concepts and create an open environment for early-stage dialogue, often well in advance of any financing requirement.

While general insights are useful, one-to-one meetings remain the most effective setting for progress. These discussions allow lenders and borrowers to explore the nuances of each organisation’s sustainability strategy, including data quality, target setting and governance.

For example, a borrower might share that a key emissions-reduction project depends on supplier engagement or capital allocation timing – details that could shape financing structures or covenant design. These tailored conversations foster trust and lead to more credible and practical sustainability pathways.

Importantly, sustainability engagement isn’t confined to the treasurer. Banks increasingly interact with a wide array of stakeholders within client organisations, including investor relations, sustainability teams, procurement and, sometimes, the board. This reflects the reality that sustainability affects funding strategy, investor perception and corporate reputation simultaneously.

The cross-functional nature of these conversations helps ensure that sustainability commitments are embedded across the business, rather than treated in siloes.

Sustainability-linked loans and other green or transition financing structures often act as catalysts for engagement. These instruments require borrowers to define measurable KPIs and targets, or condition the purpose of debt facilities – prompting more comprehensive internal reflection and collaboration.

For lenders, they provide a structured framework to monitor (and sometimes reward) progress and encourage transparency. Even where formal labelled financing is not pursued, the conversation it initiates can be additive to a borrower’s overall sustainability strategy.

Sustainability dialogue between corporates and banks is no longer optional; it’s a strategic necessity. As banks refine their tools, expectations and governance around sustainability, treasurers must respond with equal clarity and ambition. Proactive engagement can unlock better financing options and strengthen lender confidence, whether through labelled finance, one-to-one meetings, or cross-functional collaboration. By treating sustainability as a standing workstream, treasury teams can move from reactive compliance to active leadership – thereby maintaining a strong following from banks and other financial stakeholders.

This article first appeared in The Treasurer Issue 4, 2025