Many of the UK’s largest banks are struggling to meet Environmental, Social, and Governance (ESG) challenges, according to new research.

A report by business intelligence firm alva found that while HSBC, Lloyds, Barclays, NatWest, and Standard Chartered generate “65 per cent of the share of voice,” they have an average ESG Index score of -40.

The company said that the score, which is far below the sector average, reflects the natural disadvantage of limited adaptability when compared to less established competitors, while branch closures and global governance issues stem from a combination of large scale and a rapidly changing banking landscape

HSBC had a score of -41, Lloyds -40, Barclays -24 and NatWest -59.

According to the study, High Street banks are not keeping up with less established banking players like Paragon, which had a score of +58, Shawbrook, which had a score of +42, and Virgin Money, which had a score of +37.

Alva said that these companies are leading the ESG index due to a “stronger focus around greener products such as energy efficient mortgages and adaptability capabilities.”

In the latest Index, Virgin Money moved up the ESG benchmarking rank by an +15 places after launching sustainability linked loans and capabilities in renewable energy.

ESG Sector Index:

1. Paragon +58
2. Shawbrook Bank +42
3. Virgin Money +37
4. = Investec +31 / Sainsbury’s Bank +31
5. Schroders +21
6. Co-operative bank +19
7. Nationwide +18
8. Metro Bank +14
9. Close Brothers +12
10. Barclays -24
11. Aldermore Bank -33
12. Standard Chartered -38
13. Lloyds Banking Group -40
14. HSBC -41
15. TSB -46
16. Tesco Bank -47
17. OneSavings Bank -49
18. Santander -50
19. NatWest Group -59

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