By Sunny Lewis
PARIS, France, November 29, 2018, (Maximpact.com News ) – “The global banking industry is stepping up to the sustainability challenge,” said Satya Tripathi of India, UN assistant secretary-general, UN Environment. “I’m optimistic we’ll see a realignment of business practice – one that embraces the fact that green and socially responsible business is the best business.”
In August UN Secretary-General António Guterres announced the appointment of Tripathi as assistant secretary-general and head of the New York Office of the UN Environment Programme, (UNEP).
A development economist and lawyer, Tripathi has worked for the UN since 1998 in Europe, Asia and Africa on sustainable development, human rights, democratic governance and legal affairs. Since 2017 he has served as senior adviser on the 2030 Agenda for Sustainable Development at UNEP.
Tripathi’s role expanded, at least temporarily, as Secretary-General Guterres last week accepted the resignation of former UNEP head Erik Solheim of Norway whose spending on travel was deemed excessive.
In a bid to define the banking industry’s role and responsibilities in shaping a sustainable future, UN Environment Finance Initiative, UNEP FI) and 28 banks from around the world today launched the Principles for Responsible Banking for global public consultation at its biennial Global Roundtable at thePalais Brongniart in Paris.
The announcement came during the 4th Climate Finance Day and the UNEP FI’s Global Roundtable, which took place in Paris this week from November 26-28.
By developing the Principles, the 28 founding banks set out a clear purpose for the banking industry. It is intended to enable investors, policy makers and regulators, clients and civil society to compare banks and hold them accountable for their environmental, social and economic impacts.
The Principles require banks to be transparent and accountable. Banks are required to report publicly on the positive and negative social and environmental impacts of their investments, their contribution to society’s goals and their progress in implementing the Principles, and to engage with key stakeholders on their impacts.
The Principles are supported by an Implementation Guidance , which provides details of the rationale for each Principle and practical guidance on how banks can approach the implementation of the Principles.
The 28 founding banks developing the Principles for Responsible Banking are from five continents and 20+ countries:
Access Bank, Nigeria; Arab African International Bank, Egypt; Banco Pichincha, Ecuador; Banorte, Mexico; Barclays, United Kingdom; BBVA, Spain; BNP Paribas, France; Bradesco, Brazil; Commercial International Bank, Egypt; CIMB Bank, Malaysia; First Rand, South Africa; Garanti Bank, Turkey; Golomt Bank, Mongolia; Hana Financial Group, South Korea; Industrial and Commercial Bank of China, China; ING, Netherlands; Kenya Commercial Bank Group, Kenya; Land Bank, South Africa; National Australia Bank, Australia; Nordea, Sweden; Piraeus Bank, Greece; Santander, Spain; Shinhan Financial Group, South Korea; Societe Generale, France; Standard Bank, South Africa; Triodos Bank, Netherlands; Westpac, Australia; YES Bank, India.
Here is an overview of what will be required of the signatory banks.
The British multinational investment bank Barclays is one of the 28 founding banks and has been part of UNFI for more than 20 years. Said Jes Staley, Group CEO, Barclays PLC, “Barclays exists to help develop sustainable economies and to empower people to build better futures. We are committed to playing our part to deliver the SDGs and we do this by helping our clients to raise billions of dollars of social and environmental financing, upskilling millions of people and helping to drive job creation.”
Hassan Abdalla, CEO, Arab African International Bank, said, “The current environmental and social issues pose a multitude of opportunities and threats for financial institutions. Banks can either seize the opportunities and grow, or ignore the threats and go under. The Principles for Responsible Banking allow banks to generate new revenue streams by genuinely connecting to the environment and the society.”
The Principles now enter a six-month global public consultation period before they will be implemented in September 2019.
To find out how you can take part in the global public consultation, click here.
By signing the Principles for Responsible Banking, banks will commit to being publicly accountable for their positive and negative social, environmental and economic impacts.
They agree to set public targets for addressing their negative impacts and scaling up their positive impacts to contribute to national and international sustainable development and climate targets.
Signing the Principles will be a serious commitment: banks that continuously fail to meet transparency requirements, set adequate targets and demonstrate progress will face removal from the list of signatories.
“The Principles for Responsible Banking align the banking industry with the Paris Agreement and with the Sustainable Development Goals, and they demonstrate a clear commitment from the banking industry to assume its defining role in creating a sustainable future,” said Christiana Figueres, convener Mission 2020 and former executive secretary of the United Nations Framework Convention on Climate Change, UNFCCC).
“This is the only future that is acceptable, and profitable for everyone. Every bank should become a signatory, and all regulators, investors, policy makers and civil society should support the banking industry’s implementations of the Principles,” said Figueres.
Said Daniel Wild, Co-CEO of RobecoSAM, the Swiss international investment company with a focus on sustainability investments, “The Principles for Responsible Banking will drive the banking industry’s alignment with the Paris Climate Agreement and the United Nations’ Sustainable Development Goals.”
“We are integrating part of the requirements of these Principles in the RobecoSAM Corporate Sustainability Assessment, CSA; the leading annual survey of companies seeking to benchmark their sustainability performance and competing for membership in the Dow Jones Sustainability Indices, DJSI;” said Wild.
“Banks that want to be best in class in the CSA and members of the DJSI should therefore seek to align with this new global standard,” he said.
Martin Skancke, chair of the Principles for Responsible Investment, PRI; said, “The PRI has helped drive the integration of environmental, social and governance considerations into investor decision-making. It is now time for the banking sector to step up in both assessing the risks they are exposed to, and the impacts of their financing activities in realizing the sustainable development goals.”
The Roadmap is available on the UNEP FI and PRI websites, as well as at Fiduciary Duty 21.
Banks and stakeholders around the world are invited to provide feedback and input to guide their further development, and to signal their support by becoming Endorsers of the Principles for Responsible Banking and help shape the future of banking.
Finance in France, the last in a series of market analyses from the Fiduciary Duty in the 21st Century program, was also launched Tuesday at UNEP FI’s 2018 Global Roundtable in Paris. It was presented to Brune Poirson, Secretary of State, Ministry for the Ecological and Inclusive Transition.
After extensive consultation with major French institutional investors, regulators and industry associations, Finance in France sets out recommendations for the French market to build upon its leadership position and achieve further progress in mainstreaming responsible investment.
Environmental, social and governance, ESG) are the three central factors in measuring the sustainability and ethical impact of an investment in a company or business.
While France is recognized as one of the leaders in sustainable finance, obstacles remain to the full integration of ESG issues into investment practice. Regulatory developments in France and Europe require actors in the financial sector to clarify their fiduciary duty and incorporate ESG issues into investment strategies.
“This project, driven by France’s leadership in sustainable finance and recent momentum in responsible investment, builds knowledge and shares experience among policy makers and investors,” said Eric Usher, who heads UNEP FI. “It provides guidance on how to fully integrate ESG factors into investment practice and align investment with the Paris Agreement and the SDGs, including encouraging analysis and measurement of the impacts of investment activities.”
Augustin de Romanet, chairman, Paris EUROPLACE and Chairman and CEO of ADP payroll and HR services group said, “In this new international context, marked by the withdrawal of the United States from the Paris Agreement and by an increased involvement of Europe and new driving forces – China and India – in favor of the fight against global warming, it is today, more than ever, essential to increase the contribution of the global financial industry to these issues and to consolidate and promote the position of the Paris Financial Center as a world leader in green and sustainable finance.”
Image Source: Euros on a spreadsheet, November 14, 2018, Cologne, Germany, Photo by Marco Verce) Creative Commons license via Flickr