The United Nations (UN) has announced that 56 banks worldwide have endorsed its Principles for Responsible Banking, which will be launched on 22 September 2019 at the UN General Assembly taking place in its headquarters in New York.
The six principles, which have been co-developed by the UN and the banking industry, have been created with the aim of providing signatories with “a single framework that embeds sustainability at the strategic, portfolio and transactional levels and across all business areas”.
The UN said the principles would help banks remain competitive while ensuring they create value for both their shareholders and society.
“In an era of increased expectations for banks to support and meet the sustainability goals and standards set by their customers, clients, investors and society at large, these principles define what it means to be a ‘responsible bank’,” the UN stated in its announcement.
“They have been designed to enable all banks to implement them, no matter their specific context or whether the bank is only beginning to integrate sustainability into its business.”
The principles are as follows:
- Alignment: “We will align our 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 relevant national and regional frameworks. We will focus our efforts where we have the most significant impact.”
- Impact: “We will continuously increase our positive impacts while reducing the negative impacts on, and managing the risks to, people and [the] environment resulting from our activities, products and services.”
- Clients and customers: “We will work responsibly with our clients and our customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.”
- Stakeholders: “We will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals.”
- Governance and target-setting: “We will implement our commitment to these principles through effective governance and a culture of responsible banking, demonstrating ambition and accountability by setting public targets relating to our most significant impacts.”
- Transparency and accountability: “We will periodically review our individual and collective implementation of these principles and be transparent about and accountable for our positive and negative impacts and our contribution to society’s goals.”
“The Principles for Responsible Banking are about achieving large-scale progress rather than small-scale innovation,” Eric Usher, head of the UN Environment Programme Finance Initiative, said.
“We are working with all banks, regardless of their current negative or positive sustainability impacts, to truly transform the global banking industry into one that is both meeting society’s sustainability needs and driving progress on society’s sustainability goals – today and into the future.”
The UN expects banks, within the first 14 months of becoming a signatory to the principles, to publicly report on their positive and negative impacts, their contribution to society’s goals, and their progress in implementing the principles.
National Australia Bank, Westpac, ING are among the 28 founding banks, with 56 in total endorsing the principles.
Tas Bindi is the features editor on the mortgage titles and writes about the mortgage industry, macroeconomics, fintech, financial regulation, and market trends.
Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business.