Banks Worth $47 trillion Adopt New UN-backed Principles of Responsible Banking
Banks collectively with more than $47 trillion in assets, or a third of the global industry have assented to new principles of responsible banking initiated by 30 global banking firms and supported by the United Nations in a massive boost for climate action and the shift from “brown to green” models of economic growth.
BRANDPOWER gathered that the Principles for Responsible Banking provide the much-needed framework for the sustainable banking system of the future and also enable the banking industry to demonstrate how it makes a positive contribution to society.
Speaking at the launch of the banking principles held recently, UN Secretary-General António Guterres said “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,” adding that they also “create the accountability that can realize responsibility, and the ambition that can drive action.”
It was gathered that by signing up to the Principles, the banks aim to increase their positive impacts, while reducing the negative impacts, and managing risks to people and the environment from their products and services.
“How you, as business leaders, respond can be a defining moment for our global goals. Only public-private cooperation can deliver sustainable development,” Mr. Guterres said.
He further challenged the 130 Founding Signatories and over 45 of their CEOs who gathered for the event to not only align their business goals with the SDGs, the UN’s blueprint for tackling poverty, protecting the environment and ensuring a fairer world for all, but also to support gender equality, to invest in climate action and to disinvest from fossil fuels and pollution in general.
“We will rely on you to scale up financing to businesses that stimulate green growth,” the Secretary-general said, adding: “Place your bets on the green economy, not the grey economy, because the grey economy will have no future.”
Picking up that thread, Inger Andersen, Executive Director of the UN Environment Programme (UNEP), told the bankers: “When the financial system shifts its capital away from resource-hungry, brown investments to those that back nature as solution, everybody wins in the long-term.”
The Principles were developed by a core group of 30 Founding Banks through an innovative global partnership between banks and the UNEP Finance Initiative (UNEP FI).
Among the 30 founding banks include the Barclay bank of the United Kingdom, the Standard Bank Plc, Access Bank Plc and Zenith Bank Plc.
While action on climate change is growing, it is still far short of what is needed to meet the 1.5°C target of the Paris Agreement. Meanwhile, biodiversity continues to decline at alarming rates and pollution claims millions of lives each year.
Against this background, UNEP has said that more ambition, backed by a step change in investment from the private sector, is needed to tackle these challenges and ensure that humanity lives in a way that ensures an equitable share of resources within planetary boundaries.
The banking and private sectors can benefit from the investment they put into backing this transition. It is estimated that addressing the SDGs could unlock $12 trillion in business savings and revenue annually and create 380 million more jobs by 2030.
Samson Oyedeyi
