“The UN Principles for Responsible Banking are a guide for the global banking industry to respond to, drive and benefit from a sustainable development economy. The Principles create the accountability that can realize responsibility, and the ambition that can drive action”, says UN Secretary General Antonio Guterres.
The Principles are a framework that embeds sustainability at the strategic, portfolio and transactional levels. The ambitions of the Principles are for the banks to
- align its business strategy to be consistent with and contribute to individuals’ needs and society’s goals as expressed in the UN Sustainable Development Goals and the 2015 Paris Climate Agreement and other relevant frameworks;
- continuously increase their positive impacts while reducing the negative impact on, and managing the risks to, people and environment resulting from our activities, products and services;
- work responsibly with their clients and its customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations;
- proactively and responsibility consult, engage and partner with relevant stakeholders to achieve society’s goals;
- implement their commitment to the Principles through effective governance and a culture of responsible banking; and
- periodically review their individual and collective implementation of the Principles and be transparent about and accountable for their positive and negative impact and their contribution to society’s goals.
The signatories shall within 18 months from the signing date and annually thereafter, publish a report and self-assessment on the Principles. Within four years, each signatory shall have fully implemented the steps regarding impact analysis, target setting & implementation and accountability as outlined in UNEP FI’s “Key Steps to be Implemented by Signatories”.
Launching of the Principles is one of many recent initiatives from the banking industry to integrate sustainability into their business models. Banks are working diligently to balance sustainability with the continuation of financing non-renewable sources of energy in the transition to a low carbon society. Some banks also emphasize the need for further collaboration between international banks to develop satisfactory methods for assessing climate risk and adaptation to the 2015 Paris Climate Agreement. Further progress and developments in these areas are expected in the years to come.
The full version of the Principles for Responsible Banking and the related Framework Documents can be found here.