“We believe that only in an inclusive society founded on human dignity, equality and the sustainable use of natural resources, can our clients and customers and, in turn, our businesses thrive.”
This is the shared vision of the future of banking set out in the Signature document.
To realise this, signatory banks must undertake three key steps:
Analyse current impact on people and planet
Step one is to understand where a signatory bank has the greatest positive and negative impact as a result of its practices and policies. This forms a baseline for identifying where the greatest change can be achieved. Transparency is central to the Principles.
Step 1 requires that signatory banks undertake a thorough impact analysis and publicly report the findings. The reporting and self-assessment template sets out exactly what this must look like.
Set targets to improve impact, and implement
Step two builds on the impact analysis. Signatory banks must develop at least two targets that address the most significant impacts they have identified. The targets must be ambitious enough to objectively bring the bank’s business and portfolio into alignment with the respective Sustainable Development Goals and Paris Climate Agreement.
Banks must set milestones and define actions to meet the targets, as well as put in place a governance framework to oversee and ensure progress.
Publicly report on progress
Signatory banks must report regularly on how they are implementing the Principles for Responsible Banking, the targets they have set and the progress made, using the Reporting and Self-Assessment Template. This should be part of their regular, annual reporting.
Key elements have to be assured. Each bank’s reporting contributes to the overall progress report published every two years by UNEP FI.
The Framework documents are available in other languages.
Frequently Asked Questions
+ How much flexibility will banks have in adapting the Principles for localized requirements?
- Signatories can work towards implementing the Principles within their national contexts and build on their strengths.
- In working towards the Principles, each signatory will identify priority areas where they have the largest potential for limiting negative and achieving positive impact (i.e. focus on what is most material to the bank, its clients and the society where it operates). For banks operating predominantly in national or regional contexts, targets can relate to national or regional frameworks.
+ How can small local or regional banks with fewer resources be expected to meet the commitments?
- The Principles have been designed to allow any bank genuinely committed to sustainability and responsible banking to sign up and set targets and ambitions in line with their context, strengths and starting points.
- Signatories are simply required to show discernible progress towards full implementation of the Principles and all signatories will benefit from peer learning and ongoing UNEP FI support in working towards full implementation of the Principles.
+ How are the Principles for Responsible Banking related to other frameworks that apply to the banking sector?
The Principles are the only sustainability framework for banks that apply to the whole institution, providing guidance at the strategic, portfolio and transaction levels across all business areas.
This differs from other frameworks that are applied at only one of these levels, for example:
- the Equator Principles or the IFC Performance Standards at the transaction level
- the PRI for asset management
- the Guiding Principle for Business and Human Rights for a single topic.
The Principles will serve as a guide to banks in applying these other frameworks within the context of their plans to align their business strategies with society’s goals.
The Principles for Responsible Banking offer guidance at all levels and strategic direction to adapt and position a bank so it secures its place in – and seizes the opportunities of – a transforming economy and society. They provide:
- A vision and purpose linked to society’s goals
- A comprehensive framework for understanding impact on people and the environment, and communicating contribution to society
- Guidance at all levels: Strategic, portfolio and transaction
+ How are the Principles for Responsible Banking related to regulations in my region/country?
The Principles for Responsible Banking are a general framework that can be applied in any international and local context regardless of the size of bank. Regulators and policy makers can align their requirements with the Principles framework, and may use the Principles as a tool for assessing banks in the following ways:
- To identify which banks are best positioned to address emerging risks and challenges while enhancing public trust in the banking system
- To identify which banks are contributing to national and international policies and goals based on plans made within a consistent framework.
+ How will the Principles Framework Documents and Guidance Document be reviewed and updated over time?
- Updates to the Principles’ Framework Documents and Guidance Document will be needed overtime to reflect changes in society’s needs, the guiding frameworks (SDGs and Paris Agreement) and best practice in the sector.
- Therefore, during their meetings every two years, the signatories to the Principles for Responsible Banking will discuss any needs to update the Guidance Document, adapt signatory requirements or, if necessary, revise the Principles themselves.