Source: Small Island Developing States
23 September 2019: A group of 130 banks from 49 countries launched the UN Principles for Responsible Banking in advance of the UN Secretary-General’s Climate Action Summit. The six Principles aim to accelerate the banking industry’s contribution to achieving the SDGs and the Paris Agreement on climate change.
In the Principles, banks recognize that the success and ability of the banking industry to remain profitable and relevant is “intrinsically dependent on the long-term prosperity of the societies we serve,” and stress their commitment to an inclusive society founded on human dignity, equality and sustainable natural resource use. Therefore, banks commit to use their products, services and relationships to “support and accelerate the fundamental changes in our economies and lifestyles necessary to achieve shared prosperity for both current and future generations.” The six UN Principles for Responsible Banking are:
- Alignment: Signatories commit to align their business strategies to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the SDGs, the Paris Agreement and relevant national and regional frameworks.
- Impact and Target Setting: Signatories will continuously increase their positive impacts and reduce the negative impacts on, and manage the risks to, people and the environment resulting from their activities, products and services. Signatories will set and publish targets where they can have the most significant impacts.
- Clients and Customers: Signatories will work with clients and customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
- Stakeholders: Signatories will responsibly and proactively consult, engage and partner with relevant stakeholders to achieve societal goals.
- Governance and Culture: Signatories will implement the Principles through effective governance and a culture of responsible banking.
- Transparency and Accountability: Signatories will periodically review individual and collective implementation of the Principles and be transparent about and accountable for positive and negative impacts and their contributions to societal goals.
The Principles will help to create the accountability that can realize the responsibility and the ambition that can drive action.
Speaking at the launch event, UN Secretary-General António Guterres said the Principles are a “guide for the global banking industry to respond to, drive and benefit from a sustainable development economy.” He underscored the role of public-private cooperation in delivering sustainable development, and said the Principles will help to “create the accountability that can realize the responsibility and the ambition that can drive action.” Guterres challenged the 130 Founding Signatories and 45 CEOs participating in the event to not only align their business goals with the SDGs but also to invest in climate action, divest from fossil fuels and pollution and support gender equality, including by making more loans available for women-owned businesses and supporting small and medium-sized enterprises (SMEs), many of which are owned by women.
Participating banks will track their progress in implementing the Principles through a Reporting and Self-Assessment Template, which aims to guide banks’ transparency and promote impact. Signatory banks are required to report on their implementation of the Principles within 18 months after signing and annually thereafter. The Template minimizes the reporting burden for signatories by allowing banks to provide references and links to where in their existing reporting and public domains the required information can be found.
Interested banks can become a Signatory of the Principles for Responsible Banking by identifying and committing to key steps regarding target setting and implementation, impact analysis and accountability, in line with the Principles, and then having their CEO sign and submit the signature document.
A core group of 30 Founding Banks developed the Principles through a partnership between banks and the UN Environment Programme Finance Initiative (UNEP FI). The group of 130 banks that launched the Principles for Responsible Banking represent more than USD 47 trillion in assets. [UN News Story] [UNEP Press Release] [Principles Webpage] [Principles for Responsible Banking] [UN Secretary-General Statement] [Signatory Statements] [Launch Event Webpage] [SDG Knowledge Hub Story on Climate Action Summit]