Global standards for sustainable finance
Eric Usher, Head of the United Nations Environment Programme Finance Initiative (UNEP FI) explains the rationale behind the Principles for Responsible Banking. UNEP FI is a global partnership bringing the UN together with more than 230 banks, insurers and asset managers to develop sustainable finance and responsible investment agendas.
The Six Principles for Responsible Banking provide the framework for the sustainable banking system of the future, and help the industry to demonstrate how it makes a positive contribution to society.
This will support a bank to remain competitive in the future, as a banking industry clients, customers and investors continue to demand an increased social responsibility standard from the banks with whom they do business.
By aligning its strategy with society’s goals, the bank shows that its business – and the products and services it provides – can support a sustainable future while achieving long-term business benefits. It signals that the bank accepts its shared responsibility for shaping and securing our future.
Aligning its strategy with individual needs means not only that the bank takes people’s economic or financial necessities into consideration, but also prevents and addresses any risk of adverse impacts on society.
Bank customers will also be able to trust and have confidence in their banks’ social responsibility activities if the bank is a signatory to the Principles for Responsible Banking.
Engagement by the banking industry is very good; momentum continues to grow. Twenty-eight banks stepped forward initially to lead in shaping the Principles for Responsible Banking. In fact, we should not forget that this is an industry-led initiative by the banks themselves, with facilitation and support coming from UNEP FI.
Originating with the initial core group of 28 banks who endorsed the draft Principles, the signatory bloc has now more than doubled to more than 70 banks who have formally endorsed the Principles – with more coming on board almost daily. In addition, hundreds of banks, as well as investment and insurance institutions, have taken part in the open consultative process running through 31 May.
The Principles for Responsible Banking will be officially launched and signed by endorsing banks on 22 September 2019, at a high-profile event being held at the UN headquarters in New York City, during the annual meeting of the UN Secretary-General and heads of state – the UN General Assembly.
UNEP FI is confident that the Principles will accelerate the banking industry’s contribution to achieving society’s goals as expressed in the Sustainable Development Goals and the Paris Climate Agreement, and in so doing, contribute to a better world in which society and banks can prosper even more.
The Chartered Banker Institute became one of the first UK organisations to endorse the UN Principles for Responsible Banking in February 2019.