The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

 Ask most major banks or building societies whether they have an ESG strategy, and the answer will be yes. Ask whether they publish a sustainability report, and the answer will again be yes. But as discussions in our ESG in Action podcast highlight, how ESG shapes the daily decisions made by their product teams, credit committees, relationship managers, and procurement functions is often less clear.

This is the “missing middle”: the point at which many ESG strategies stall — between high-level commitment and consistent operational delivery.

Strategy is necessary but not sufficient

Having clear ESG commitments and governance structures at board level is essential. But a strategy that lives in a board paper or annual sustainability report has limited influence on the commercial and operational decisions that determine actual ESG actions. The real work is in translating strategic intent into consistent, embedded practice across every part of the business.

The challenge of cross-functional ownership

ESG does not sit neatly within any single business function. It cuts across all of them and, without deliberate effort to build shared ownership and clear accountability, risks remaining the responsibility of a small sustainability team. Effective ESG integration demands that everyone understands ESG to be part of their role and that there is clarity on who is accountable for the decisions that follow. Without that, firms risk inconsistent outcomes and increased regulatory scrutiny.

Collaboration beyond the organisation

Embedding ESG is not just an internal challenge. Supply chains, customer relationships, and professional networks all play a role. Those in the financial services sector will be acutely aware that their own ESG performance is shaped in part by the decisions of their suppliers and the organisations they finance, and that meaningful progress often requires active engagement and collaboration.

Closing the gap

The distance between ESG strategy and operational delivery is real, but it can be reduced.  Firms that close this gap will be better placed not only to meet regulatory expectations, but to evidence consistent and defensible decision-making, respond to evolving customer demands, and manage the long-term risks ESG is intended to address. 

ESG in Action is a podcast series from UK national law firm TLT, which explores how organisations are tackling these ESG issues. Recent episodes feature guests from Santander, Nationwide and Triodos, as well as charities and household brands from other industries.

Listen to these episodes and more from the ESG in Action podcast series on Spotify, Apple Podcasts or on the TLT website