The United Nations Conference on the Human Environment (Stockholm, 1972), established the United Nations Environment Programme (UNEP) as the environmental conscience of the United Nations (UN) system.
Since its inception, UNEP has had a mandate to encourage economic growth compatible with the protection of the environment. This element of UNEP’s role was considerably enhanced at the UN Conference on Environment and Development (The Earth Summit) (Rio de Janeiro, 1992), which placed great emphasis on promoting sustainable development – “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”1
UNEP has worked closely with industry in developing environmental management strategies, and started working with forward-looking organisations in the financial services sector at the beginning of the 1990s. UNEP was convinced that the financial sector had a valuable contribution to make in protecting the environment while maintaining the health and profitability of their businesses.
Launching the UNEP Finance Initiative
The concept of the UNEP Finance Initiative was launched in 1991 when a small group of commercial banks, including Deutsche Bank, HSBC Holdings, Natwest, Royal Bank of Canada, and Westpac, joined forces with UNEP to catalyse the banking industry’s awareness of the environmental agenda. In May 1992, in the run up to the Rio Summit that year, the UNEP Statement by Banks on the Environment and Sustainable Development was launched in New York, and the Banking Initiative was formed.
This Initiative, which operated under the auspices of the United Nations Environment Programme, engaged a broad range of financial institutions, including commercial banks, investment banks, venture capitalists, asset managers, and multi-lateral development banks and agencies – in a constructive dialogue about the nexus between economic development, environmental protection, and sustainable development. The Initiative promoted the integration of environmental considerations into all aspects of the financial sector’s operations and services. A secondary objective of the initiative was to foster private sector investment in environmentally sound technologies and services.
Engaging insurers and reinsurers
In 1995, UNEP joined forces with a group of leading insurance and reinsurance companies, including General Accident, Gerling Global Re, National Provident, Storebrand, Sumitomo Marine, & Fire, Swiss Re, as well as pension funds, to launch the UNEP Statement of Environmental Commitment by the Insurance Industry. In this voluntary commitment, signatory companies pledge that they will aim at achieving a balance of economic development, the welfare of people and a sound environment. The Statement acknowledges the principles of sustainable development and the precautionary principle. It also calls upon insurers to incorporate environmental considerations into their internal and external business activities.
In 1997, the Insurance Industry Initiative (III) was formed to fund research activities, and to sponsor awareness meetings and workshops and the annual regular meetings of the Initiative.
Building the Initiative
This same year, the UNEP Statement by Banks on the Environment and Sustainable Development was redrafted, in order to broaden its appeal to the wider financial services sector At this stage, the Banking Initiative was renamed the Financial Institutions Initiative (FII).
From 1999, both the Financial Institutions Initiative (FII) and Insurance Industry Initiative (III) started to work more closely together on issues of mutual interest, and UNEP FI’s core working groups were formed – the Climate Change Working Group, the Asset Management Working Group, and the Environmental Management and Reporting Working Group.
The first UNEP FI Global Roundtable to be co-convened by the FII and III was held in Frankfurt (2000).
Merging the UNEP Finance Initiative
At the 2003 Annual General Meeting (Geneva), the UNEP Financial Institutions Initiative (FII) and the UNEP Insurance Industry Initiative (III) agreed to merge, forming one Initiative to be known as the UNEP Finance Initiative. Both groups have been, over the last number of years, collaborating very closely together through the Initiative’ work programmes and regional activities and this formalization was the final step in that process, and will allow the Secretariat and Steering Committee to develop an integrated work programme with added value for all signatory institutions.
Adapting to best serve the finance industry
For nearly 30 years, responsible investors worked with UNEP FI on influential initiatives such as the Property Working Group, as well as publishing landmark reports including the “Freshfields Report” that set out the legal duty for incorporating ESG issues into investor portfolios, and is regarded as the first major step in mainstreaming responsible investment.
In order to accelerate leadership in responsible investment and better serve the investment community and the financial industry at large, in 2021, UNEP FI and our sister organisation the Principles for Responsible Investment established a joint initiative, the Investment Leadership Programme (ILP), and merged UNEP FI’s investment membership with PRI’s. The platform brings together small groups of leading responsible investors to work on initiatives that are considered leading best-practice. Investors continue to have to access to ILP leadership projects and initiatives through their membership of the PRI.
The Initiative continues to receive government recognition for its work via UNEP’s Governing Council, the Commission on Sustainable Development, and through various environmental conventions, such as the Convention on Biological Diversity and the United Nations Framework Convention on Climate Change.