UNEP FI and 28 Banks Launch a Public Consultation on the Principles for Responsible Banking
On 26 November 2018, the UN Environment Finance Initiative (“UNEP FI”) and 28 banks from around the world launched a global consultation to establish Principles for Responsible Banking (“Principles”).
What do the Principles seek to achieve?
The Principles aim to set out the banking industry’s role and responsibilities in shaping a sustainable future and to align the banking sector with the objectives of the UN Sustainable Development Goals (“SDGs”) and the 2015 Paris Climate Agreement.
What are the Principles?
The Principles represent a single framework for the banking industry that aim to embed sustainability at strategic, portfolio and transactional levels and across all business areas. The Principles that banks are asked to sign-up to are as follows:
- Alignment: Banks will align their business strategies to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the SDGs, the Paris Climate Agreement and relevant national and regional frameworks. Banks will focus their efforts where they have the most significant impact.
- Impact: Banks will continuously increase their positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from their activities, products and services.
- Clients and Customers: Banks will work responsibly with their clients and customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
- Stakeholders: Banks will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals.
- Governance and Target Setting: Banks will implement their commitment to the Principles through effective governance and a culture of responsible banking, demonstrating ambition and accountability by setting public targets relating to their most significant impacts.
- Transparency and Accountability: Banks will periodically review their individual and collective implementation of the Principles and be transparent about and accountable for their positive and negative impacts and their contribution to society’s goals.
What is the consultation period?
A six-month consultation period is underway as a preliminary step to prepare the Principles for signature at the United Nations General Assembly in September 2019. Institutions, organisations and interested groups around the world are invited to contribute comments and suggestions to help its development.
Who are the 28 banks that launched the Principles with UNEP FI?
Access Bank (Nigeria), Arab African International Bank (AAIB) (Egypt), Banco Pichincha (Ecuador), Banorte (Mexico), Barclays (United Kingdom), BBVA (Spain), BNP Paribas (France), Bradesco (Brazil), Commercial International Bank (CIB) (Egypt), First Rand (South Africa), Garanti Bank (Turkey), Golomt Bank (Mongolia), Hana Financial Group (South Korea), Industrial and Commercial Bank of China (ICBC) (China), ING (Netherlands), KCB 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 Group (Australia), YES Bank (India).
Following completion of the global public consultation period (which ends 31 May 2019), the Principles are scheduled to be signed by participating banks from around the world at the United Nations General Assembly in New York in September 2019. 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.
If you would like further information on the latest developments in sustainable and green finance, please contact Roy Parker or Éamon Ó Cuív or your usual contact in McCann FitzGerald.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.