In their otherwise excellent HBR post, “Sustainability In Financial Services Is Not About Being Green,” Robert Eccles and George Serafeim may have missed the elephant in the room. They rightly say that

The next time we hear about a bank or insurance company’s ‘green program’—like using energy efficient light blubs or operating out of a LEED Platinum building—we’ll either scream or throw up….[because] these issues are simply not material to the sustainability of the institution itself.

What’s material? “Their performance on social and governance issues.” Well, yes, since these go to fundamental issues of trust in an industry whose business is all about trust—trust which has been deeply damaged in the last five years.

But this industry is also in the business of investment—that is, of both providing capital and managing risk—which makes its performance on environmental issues deeply material as well. No, not the performance of its buildings. What’s far more important is the design of its underwriting standards and the performance of its investments. How does a financial institution balance its investments in the old energy economy of fossil fuels and climate disruption with the new energy economy of efficiency, renewables and distributed generation? How does it consider the impacts of climate, toxicity and biodiversity risk on its investments in businesses, real estate, and markets? How does it protect its own financial sustainability through active policy initiatives that are consistent with its ESG mission and goals.

Social and governance issues are critical as well. But as with all sustainability matters—as with all strategy discussions—materiality must begin with the most fundamental question of all: “What business are you really in?” (Not “what is the thing you sell or the transaction you transact?” but “what is the real underlying value you deliver to your customers?”)

That’s the key that opens the door—for every company and industry, not just financial services.