On 23 September 2019, during the annual United Nations General Assembly the Principles for Responsible Banking (the Principles) were launched.
The Principles have been designed by a core group of 30 ‘founding banks’ together with the UN Environment Programme’s Finance Initiative. They are intended to provide a framework for a sustainable banking system that responds to and drives a global sustainable development economy, and guide the banking industry to align itself with the goals expressed in the Sustainable Development Goals and the Paris Climate Agreement.
Target setting in the most material areas is a key feature of the Principles. Signatory banks are to set and publish targets in line with society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national frameworks, in the areas where they have the most significant positive and negative impact. Signatory banks will also report publicly on their positive and negative impacts, their contribution to society’s goals and their progress in implementing the Principles, and to engage with key stakeholders on their impacts.
The framework documents for the Principles are:
- the Principles signature document. This contains six principles for responsible banking and their preamble;
- the key steps to be implemented by signatories. These detail key steps regarding impact analysis, target setting and implementation, and accountability a signatory bank needs to take to ensure the effective implementation of the Principles; and
- the reporting and self-assessment template. This guides signatory banks’ transparency on their progress in implementing the Principles.
Signatory banks commit to the ambitions set out in the Principles:
- we will 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 relevant national and regional frameworks;
- we will continuously increase positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from our activities, products and services. To this end, we will set and publish targets where we can have the most significant impacts;
- 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;
- we will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals;
- we will implement our commitment to these Principles through effective governance and a culture of responsible banking; and
- 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.