Sustainable banking principles to be launched in November

Banks from five different continents have joined forces to redefine the sector's purpose, in alignment with the UN Sustainable Development Goals (SDGs) and the Paris Agreement.

Twenty-six banks are leading the initiative, convened by the UN Environment Programme Finance Initiative (UNEP FI).

The banks are currently developing a series of principles that will help achieve the following targets:

• direct banks' efforts in alignment with society's goals, as expressed in the SDGs, the Paris Agreement, as well as national and regional frameworks;
• set a global benchmark for sustainable banking;
• drive ambition by requiring signatory banks to set goals for, and report on, their contribution to national and international social, environmental and economic targets;
• ensure accountability and transparency on banks' impacts; and
• challenge the banking industry to play a leading role in creating a more sustainable future.

The first in-person meeting of the 26 banks took place in London in April, while the first draft of the principles is expected to be launched during the UNEP FI global roundtable on 26 November, in Paris.

UNEP FI said the process of developing the principles will include consultation with a wide range of stakeholders, such as civil society organisations, banking associations, regulators and UN bodies.

They will be similar to the Principles for Responsible Investment (PRI) and the Principles for Sustainable Insurance (PSI), which aim to address the long-standing need for an umbrella framework to cover all aspects of sustainable banking.

Environmental Finance hosted a webinar last month, discussing the banking sector's response to climate transition risks.

The main conclusion of the webinar was that banks are still in "the early days" of understanding and addressing the climate risks in their portfolios.

Members of the initiative include: Access Bank, Arab African International Bank, Banco Pichincha, Banorte, Barclays, BBVA, BNP Paribas, Bradesco, Commercial International Bank, First Rand, Garanti Bank, Golomt Bank, Hana Financial Group, Industrial and Commercial Bank of China, ING, KCB Group, Land Bank, Nordea, Piraeus Bank, Santander, Shinhan Financial Group, Societe Generale, Standard Bank, Triodos Bank, Westpac Group and YES Bank.

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