UN and Leading Banks Launch Principles for Responsible Banking
The United Nations and leading banks launched the Principles for Responsible Banking, with 130 banks collectively holding USD 47 trillion in assets and representing one-third of the global banking sector signed up. The Principles were developed by a core group of 30 Founding Banks through an innovative global partnership between banks and the United Nations Environment Program Finance Initiative (UNEP FI). UNEP FI also published the frequently asked questions (FAQs) and a guidance document on the principles. The guidance will support banks in their implementation of the principles and point to relevant resources, tools, frameworks, and good practices.
In the Principles, banks commit to strategically align their business with the goals of the Paris Agreement on climate change and the sustainable development goals and to massively scale up their contribution to the achievement of both. The Principles are supported by a strong implementation framework that defines clear accountabilities and requires each bank to set, publish, and work toward ambitious targets. By creating a common framework that guides banks in growing their business and reducing risks through supporting the economic and social transformation required for a sustainable future, the Principles pave the way for transformation to a sustainable banking industry. The Principles for Responsible Banking include the following:
- Alignment—Align business strategy to be consistent with, and contribute to, individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement, and the relevant national and regional frameworks.
- Impact and Target Setting—Continuously increase positive impact while reducing the negative impact on, and managing the risks to, people and environment resulting from the activities, products, and services.
- Clients and Customers—Work responsibly with the clients and customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
- Stakeholders—Proactively and responsibly consult, engage, and partner with relevant stakeholders to achieve society’s goals.
- Governance and Culture—Implement commitment to these principles through effective governance and a culture of responsible banking.
- Transparency and Accountability—Periodically review individual and collective implementation of these principles and be transparent about and accountable for positive and negative impacts and contribution to society’s goals.
The Principles for Responsible Banking require bank to take three key steps designed to ensure the effective implementation of the principles and to enable a bank to continuously improve its impact and contribution to society. These key steps are impact analysis, target setting and implementation, and accountability. A reporting and self-assessment template has also been released, which guides banks’ transparency on their progress in implementing the principles and on their impact. One day after the launch of the Principles for Responsible Banking, 31 of their Signatories with over USD 13 trillion in assets have announced a Collective Commitment to Climate Action which sets out concrete and time-bound actions the banks will take to scale up their contribution to and align their lending with the objectives of the Paris Agreement on climate.
Related Links
- News Release
- Statement on Bank Commitement
- Principles for Responsible Banking
- Key Steps to be Implemented by Signatories (PDF)
- FAQs
- Reporting and Self-Assessment Template (DOCX)
Keywords: International, Banking, Sustainable Banking, FAQ, Governance, Principles for Responsible Banking, UNEP FI, Climate Change, UN, ESG
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