This exploratory study investigates how banks, engaged in sustainable lending, monitor the performance of small and medium entrepreneur (SME) borrowers to be environmentally and socially responsible throughout the life of the loan. We focus on domestic banks that have adopted sustainable lending in their commercial lending activities to SMEs. A phenomenological inquiry into the lived experiences of four bankers based in Europe and one banker in North America revealed the lack of formal performance measurement systems to monitor compliance with sustainability requirements. We identify that banks resorted to the use of storytelling to report on the performance of their sustainable lending activities. The study concludes with two recommendations for banks. First, banks could avail of the services of external consultants who specialize in the measurement of sustainability activities. Second, banks could develop internal expertise through training and hiring of personnel with experience in measuring environmental and social impacts.
