The Principles for Responsible Banking were developed by 30 Founding Banks on behalf of the whole UNEP FI membership. The draft Principles formed the basis of a six-month global public consultation. All banks were encouraged to take part. Other financial institutions and interested parties were also given the opportunity to contribute. More than 500 people took part.

Thank you for participating in the consultation process. The comments received, along with the responses and relevant changes made to the Principles based on these, are summarized here by key topic. We furthermore received numerous suggestions for frameworks, tools and resources to be included in the guidance document, as well as requests for more guidance in certain areas. We will consider these as we further develop the document.

“The Principles focus solely on big commercial banks.”
The Principles are for all types and categories of bank, regardless of their business model. They were produced by a development bank, retail banks, and universal banks, with investment departments.

“Do the Principles set out a minimum sustainability standard a bank has to fulfil before it can become a signatory”
No. The Principles for Responsible Banking set out an ambition banks from all starting points commit to working towards, not a standard that banks need to fulfill when signing up. This has been clarified following the consultation feedback by stating in the Preamble that banks ‘commit to the ambitions set out in the Principles’.
There are three key steps that banks need to implement within the first four years after becoming a signatory. These key steps around impact analysis, target setting & implementation, and accountability are designed to ensure the effective implementation of the Principles, and to enable a bank to continuously improve its impact and contribution to society.

“Who becomes the signatory to the Principles when dealing with large cooperative groups, which may have hundreds/thousands of members?”
There are many different governance structures that are applicable to such groups, which will determine the approach taken. This issue will be assessed on a case by case basis.

“If a Banking Association endorses the Principles, does that mean that all of its member banks are expected to also become endorsers or signatories?”
No. Banking Associations that endorse the Principles commit to publicly support the Principles and promote them within their networks. There is no language in the letter of endorsement implying that all or any of a Banking Association’s members have to become signatories.

“We need to see commitments, not just another framework.”
The Principles require banks to make commitments and set and publish targets addressing their most significant impacts. The Principles also require banks to be accountable for implementing their commitments and making progress on achieving their targets.

“The Principles focus very heavily on climate, what about social factors?”
The Principles for Responsible Banking drive alignment with the Sustainable Development Goals, which set our both environmental and social objectives. Following this feedback, we have further amended the Preamble to make social factors more prominent. We will also ensure that there is a balance between the focus on social and environmental factors in the Knowledge and Guidance document, which will be published in September.

“The Principles should provide a clear signal/certification of excellence.”
The Principles are not a certification programme or label of excellence. They are designed as a tool to support any bank, no matter what its current or historic level of experience in the area of sustainability, to align its business with and increase its contribution to society’s goals.

The assured self-assessment that is required from signatory banks will provide an indication of whether a bank is in line with the Principles’ requirements or not. The purpose of the assessment is not to rank banks according to their performance, but rather, to ensure banks are implementing the Principles and continuously making progress.

“The Principles should provide a clear benchmark that can guide analysts in the non-financial analysis of a bank.”
The Principles provide objective and clear requirements that banks have to report against. This ensures that the requirements are well established and standardized. Thus, reporting under the Principles will provide analysts with useful information for non-financial analysis of banks. Beyond that, the Principles for Responsible Banking are not intended as a rating framework.

“The categorization of banks into starter, intermediate and advanced banks is unnecessarily complicated, counter-productive and may deter banks from signing up.”
Following the feedback received, the categorization into starter, intermediate and advanced banks has been removed. There is only one type of banks now – signatory banks. The requirements are the same for all banks, but banks may take up to four years to fully implement the required steps (see the Key Steps to be Implemented by Signatories). Banks that are just starting out are thus well accommodated.

“Principle 2 seems to endorse an incremental approach to reducing negative impacts. The Principle should require banks to assess their impacts, make specific commitments, and ensure processes are in place to manage negative impacts before signing.”
Regarding the proposal that banks assess their impacts and make specific, time-bound commitments, this is already a key requirement and feature of the Principles. Impact assessment is embedded in Principle 2 and following the consultation feedback now also target setting. The requirements around impact analysis and target setting are further detailed in the Key Steps to be Implemented by Signatories.

Regarding the proposal that banks should have implemented processes and set targets before joining: By signing up to the Principles, banks a) join a community that provides support and helps them advance more quickly and b) publicly commit themselves to implement processes and set targets, which ensures there is pressure to fulfil these commitments even if leadership or priorities change. Thus, the current structure of the Principles – allowing banks to join at any starting point – is the most effective way to drive change and impact and with that ultimately a greater contribution to our sustainable future.

“There is simply no way for banks to align their operations with the Paris Climate Agreement while continuing to finance new fossil fuel infrastructure. At a minimum the Principles should require commitment to stop financing new fossil fuel projects immediately and present a plan to phase out current financing.”
With the Principles for Responsible Banking, banks commit to align with the objectives set out in the Paris Climate Agreement. This means that through their financing activities, products and services, and client relationships banks should effectively support the development of an infrastructure and economy in line with a well-below 2-degree pathway. This pathway looks different for different countries and banks are required to implement the Principles in line with their country-context.

“The Principles should require banks to align emissions reduction ambitions with current climate science and not just the 2°C scenario outlined in Paris”
Banks are encouraged to use a science-based approach to set targets to ensure that their targets are aligned with the level of reduction needed to achieve a well-below 2°C pathway. Banks involved in the initiative, including the five banks that made the “Katowice Commitment” (all of whom are involved in the Principles for Responsible Banking), are working together to share their knowledge and develop methodologies that will enable them to establish their baselines, and determine how to align their portfolios with the goals of the Paris Climate Agreement.

“Fossil fuels should be mentioned in the Principles.”
The Paris Climate Agreement is very prominent within the Principles and the need to transition to a low-carbon economy is stipulated repeatedly. This includes a move from fossil fuels to renewable sources of energy worldwide.

“Suggest changing the language in Principle 1 to 'SDGs, Paris and/or relevant national and regional frameworks' which would allow us to align with developing standards for transition financing relevant to our context.”
A bank’s business strategy should be geared towards contributing to the SDGs and Paris Climate Agreement and relevant national or regional frameworks. This wording means that the national or regional context informs the bank’s contribution to the SDGs and Paris Climate Agreement.

The proposed amendment would result in banks being able to simply focus on national/regional frameworks.

“If a Group or large bank is signing the Principles, is there room for different levels of implementation across different business divisions and subsidiaries?”
If a financial institution signs at group level, then it will need to implement its commitments across all main business areas / divisions/ subsidiaries to which the Principles for Responsible Banking apply.

While focus and “level of implementation” may differ across different subsidiaries / business areas, progress needs to be shown for all main business areas/geographies. The bank is also required to disclose the extent of implementation across the organization.

“Banks should finance for the real economy as opposed to engaging in speculative activities in the financial market.”
We assume what is meant by ‘speculative activities’ is a reference to inter-bank trading of derivatives and other financial instruments. These instruments can have positive impacts for society, through managing risk and enabling a greater flow of finance for sustainability. What is important is that a culture of responsible banking is at the core of all business that a bank conducts.

“Each principle should be followed by specific and fit-for-purpose minimum requirements to be met by the bank in order to ensure compliance with the principle in daily business.”
The Principles for Responsible Banking are applicable to banks operating in very different contexts around the world and to banks with very diverse business models. For banks to create the highest positive impact where it matters most to the society they operate in, requires that they can implement according to their context and leverage the unique characteristics of their business.

At the same time, in line with the feedback provided here, there need to be common requirements that ensure all signatories are effectively implementing the Principles and making progress in increasing their contribution to society.

Thus, the Principles require all banks to implement key steps around impact analysis, target setting & implementation, and accountability within a set timeframe of signing up. These key steps are designed to ensure the effective implementation of the Principles across all signatories and ensure all banks continuously improve their impact and contribution to society – based on their unique strengths and context. More details can be found in the Key Steps to be Implemented by Signatories.

“The Principles will improve the industry but might not be enough to provoke the needed systemic change.”
The intention of the Principles is to change banks’ approach to finance to one that is informed by the bank’s impacts and its contribution to society. Having to assess their impacts holistically, and set targets to address the impacts that are found to be the most significant will go a long way to achieving this. Furthermore, banks should be guided by existing and emerging good practice in implementing measures across the six Principles to make business decisions and practices across the whole business consistent with society’s goals.

“The Principles do not mention the importance of financial performance, which is important for shareholders and customers/clients who invest their money with banks.”
The Core Group acknowledges the importance of making profit for their individual banks’ sustainability. This will be made more explicit in the Implementation Guidance.

“Write the Principles in a softer expression that shows more feasibility.”
The Principles have been drafted in a manner that expresses ambition while ensuring that all banks feel comfortable that they can work towards achieving them.

“Principle 4 should express concretely that banks will engage with all relevant stakeholders, specifically a broad range of civil society organisations, when developing policies aimed at mitigating the impact of specific business sectors.”

Engagement with relevant stakeholders, including civil society, is an important aspect for identifying impacts, and banks are required to report on their engagement with stakeholders in this regard. Banks are also required to engage and/or partner with relevant stakeholders for the purpose of improving their impacts.

“Banks vary significantly in terms of their business activities, size and global/regional presence. The Principles should differentiate between banks because clearly in terms of scope, impact and market reach, they differ.”
The Principles have been developed for all types of banks. They are intentionally flexible to enable banks of different sizes and contexts to be able to implement them. As the Principles begin to be implemented by various types of banks, it will become possible to share their practices, when it is useful/helpful to do so.

“The PRBs should be a platform where efforts are deployed to set up a taxonomy of banking activities, products and services with a transparent mapping of the impacts, both positive and negative, that banking can have on the society and the different ways to address them.”
This is an interesting proposal that the signatory banks could decide to pick up in the future. For the moment, a taxonomy has been developed under the auspices of the European Commission and other jurisdictions are following suit. UNEP FI together with the European Banking Federation is setting up a working group to set voluntary guidelines for banks, based on the EU taxonomy of climate-related activities.

“There is too much repetition in Principles 1 and 5 with respect to target setting, and overlap between impact and target setting (Principles 2 and 5).”
We have simplified the Principles by removing reference to significant impact in Principle 1, and reference to target setting in Principle 5. Target setting is now part of Principle 2, as is reference to significant impacts. The amended Principle 2 reads as follows:

“Impact and Target Setting: We will continuously increase our positive impacts while reducing our 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.”

Consequently, Principle 5 has been renamed: ‘Governance and Culture’.

“Banks do not seem to have strong incentives to set ambitious targets, since they set their own targets. We propose that banks have to work towards specific targets instead.”
Given the diversity of banks involved and of potential impact areas, it would not be feasible to set specific targets for signatory banks. A number of considerations will inform their targets, including their portfolio, business model and strategy, specific risk considerations and societal context. Where banks are working towards similar objectives, there is the possibility of Collective Commitments/Goals that a group of banks may choose to announce and work towards jointly.

“It is unclear how to deal with possible conflicts of objectives between the Paris Agreement and individual SDGs, e.g. economic development and climate change objectives.”
It is accepted that targets and actions aimed to improve contribution to one objective of the SDG may have detrimental impacts on another. A holistic impact assessment is thus key to enable banks to identify potential negative impacts. Banks are required to acknowledge these negative impacts. The positive impacts on the targeted objectives of the SDG should substantially outweigh any negative impacts and these should be addressed/mitigated as far as feasible.

“All achievement in SDGs, if made through eroding our ecosystems and climate-resilience, could be temporary and be reversed by climate/environmental impacts”
It is recognized that at times targets aimed at positive impact may also produce negative impacts. We have made it clearer in the reporting template and the Key Steps to be Implemented by Signatories document that banks are required to analyse and mitigate significant negative impacts (potential and actual) that result from the implementation of measures to achieve their targets. This requirement will go a long way in mitigating conflicting impacts. This provision, and specific mention of ecosystems integrity, will be included in the Knowledge and Guidance document.

“Banks should give some more detail on how and where their impact is intended to be deployed, and where they find the potential to make an impact.”
Banks are required to publish an impact analysis, i.e. to identify, assess and be transparent on where they have the potential to realize the most significant positive and negative impact. As part of their public target setting, banks are required to outline the measures and actions they are planning, in order to achieve their targets – i.e. how and where their impact is intended to be deployed.

“How are targets being assessed against impact?”
Banks are required to set metrics and KPIs for each target. They will assess their progress towards achieving their targets against these metrics and KPIs. It is essential that banks establish a baseline from which they can assess their progress periodically, and report annually on it. As methodologies for assessing impact become more established, it will become easier for banks to do this.

“How do existing targets fit into the PRB?”
Where banks have already set targets, they are required to ensure that those targets meet the requirements of the Principles. This means that the targets are SMART, ambitious, address the banks areas of most significant impact, and align with the SDGs, Paris Climate Agreement, and national/regional frameworks.

Therefore, a bank can use existing targets in the fulfilment of the Principles, provided they meet these requirements.

“How often do we need to set targets?”
How often targets are set will depend on their time-horizon. It is not a requirement to set targets annually. However, banks should have a minimum of 2 targets at any given time (after the initial four-year implementation period).

“Can banks set only social targets? Or is the expectation that banks would set targets for social and environmental issues?”
The requirement is to set targets in the areas of most significant impact. Banks will explain how they arrived at the most significant impacts, and their decision to set targets in specific areas. Therefore, all of a bank’s targets might be social or all environmental or a mix of the two.

“Will we be delisted if we do not meet the targets we’ve set?”
Many factors can impact whether a target is achieved or not, including those not in a bank’s control. Banks will have to show, however, that they have implemented the measures and actions they had set out in the published strategy to achieve their targets. (see section 2.4 in the Reporting and Self-Assessment Template). A bank should further explain, why it is falling short of meeting its targets (despite its best efforts to work towards meeting them).

“We are an international bank group with many subsidiaries. At what level do we set targets and report?”
Where a bank becomes a Signatory of the Principles at the group level, reporting would be on group activities at the group level. This can contain sub-reports for subsidiaries. Targets can be set both at the global and/or local levels. A group could, for example, identify a common target at the global level, to which all subsidiaries contribute. Additionally, each subsidiary could set a local target specific to their context. Banks within a group may also become Signatories at the subsidiary level and consequently submit their own reporting, independent from the group.

“What constitutes alignment – is it measured in targets set, specific climate strategy?”
Alignment requires that a bank’s business strategy is consistent with and geared towards making a positive contribution to the SDGs, the Paris Climate Agreement and relevant national or regional frameworks, where a bank is best positioned to do so through its business.

“The Implementation Guidance, as it is currently drafted does not adequately distinguish between (a) suggestions for how a bank can implement the Principles, and (b) the reporting and review requirements.”
In response to this feedback, the requirements for implementing the Principles have been separated from the ‘guidance’ component of the Implementation Guidance. The Implementation Guidance, which will be renamed ‘The Knowledge and Guidance’ document, will exclusively provide non-binding suggestions and guidance on how banks may approach their implementation of each Principle.

“How is implementation envisaged?” 
The Principles are accompanied by a document that sets out the Key Steps to be Implemented by Signatories in a simple and methodological way.

Banks will also be guided with implementation of the Principles by the Knowledge and Guidance document (to be published in Sep. 2019) which will provide suggestions for steps that can be taken to implement each Principle. This document will be updated every two years with examples of how some banks have implemented various aspects of the Principles, including target setting. These documents, together with the support provided by UNEP FI and the community of signatory banks, will guide banks to effective implementation of the Principles.

“What criteria are banks expected to use when making assessments about where they can have the most significant impact?” The banks involved in this initiative have, through a working group led by the Positive Impact Initiative (PII) at UNEP FI, developed a tool for identifying significant positive and negative impact areas in bank portfolios. The tool, which will be included in the knowledge and guidance document, guides banks through a process of identifying the countries the bank is active in, identifying the sectors the bank is involved in in those countries, and overlaying this information with a review of positive and negative impacts (economic, environmental, and social), informed by the prevailing needs and priorities within those countries. The assessment produces an account of the banks most significant positive and negative impact areas in each country of operation.

The next task for the working group is to develop a guide for interpreting these assessments, which will also provide guidance on how the identified significant impacts inform the targets a bank sets for itself.

“Is there a proposed methodology for impact assessment? For banks covering many products and services in many countries, this could prove challenging.”
The Principles build on UNEP FI’s work on impact initiated in 2015 by its member banks and investors, and conducted through the PII. A range of tools are available for impact analysis, based on the PII’s Principles for Positive Impact Finance, which propose a holistic approach to impact analysis, compatible with existing market standards (e.g. Green/Social Bonds, Sustainability Linked Loans, IFC Operating Principles for Impact Investments). This currently includes an Impact Radar, and a set of Model Frameworks for impact analysis and management across different asset classes and financial products.

In addition to the working group that is developing a tool for impact identification, a number of PII participating banks are currently developing further methodological guidance, in particular for general purpose corporate finance and investments, via a dedicated working group.

“The Principles do not seem to use materiality as a filter for what banks are expected to work on, this should be integrated into the Principles.”
We have received similar comments from a number of organisations, and it is important to clarify this. The Principles don’t refer to materiality/material, but to “significant”. This is intentional to clarify that this refers to impact on society/environment not on bank’s risk/profitability. Similar to materiality the concept of significance/significant is intended as providing a threshold, so that issues of limited relevance can be left aside.

“Since targets are in relation to biggest impact, what about other areas of lesser impact (e.g. procurement practices, community engagement)?”
This is something that the Core Group considered extensively. In addition to setting targets, banks are required to take action across all main business areas and work towards existing and emerging good practice and standards to ensure their business practices are consistent with society’s goals and they effectively manage risks to people and planet. Banks need to evidence progress on implementing good practice relevant to the Principles across business areas in section 6.1 of the Reporting and Self-Assessment Template.

“Does the bank have to comply with all voluntary frameworks in each country where it does business or where it is active?”
Banks are expected to align with the frameworks that are most relevant in their operating contexts. The aim is to align with, and contribute towards, the goals reflected in these frameworks in order to make positive contributions to society.

“Are banks required to identify the most relevant areas for them within each SDG and focus on those, or identify the most relevant SDGs?”
We have now clarified in the Key Steps to be Implemented by Signatories document that banks would focus on the SDGs that are relevant to their contexts. This may require banks to focus on specific targets underlying those SDGs.

“Implementation of the Principles should be based on “comply or explain” approach.”
The approach taken by the PRB is for banks to explain, through their reporting, where they are in the process of implementation, while they work on fulfilling the requirements of the Principles. Banks have up to 4 years to achieve this, whereafter there will be consequences. This approach is clearly set out in the Key Steps to be Implemented by Signatories document.

“In Principle 3, what does working responsibly with customers mean? This seems quite vague.”
It means treating customers fairly, being responsible in the products offered to them, offering financial literacy programmes to help them better understand financial products and services, and their implications, and guiding them towards practices that contribute to more sustainable environmental, social and economic outcomes.

“The Implementation Guidance does not offer a consistent level of support across all six principles.”
In developing the Knowledge and Guidance document, we will ensure greater coverage and support across all of the Principle, including more support in respect of Principle 3 and 5.

“PRB is wider in scope than IFC’s Performance Standards. How do the Principles interact with other principles or policies issued by other international organizations.”
The Principles require alignment of a bank’s business strategy with the SDGs and the Paris Agreement and embedding sustainability across all business areas and at transaction, portfolio and strategic level. Therefore, the Principles are indeed much wider in scope than the IFC Performance Standards – they apply to the bank as an entire institution, while the IFC Standards apply to project finance. The IFC Standards are current best practice for project finance and as such a framework banks that do project finance can and should work towards implementing as part of their commitments under the Principles for Responsible Bnaking to manage significant risks to people and planet.

Similarly, the Implementation Guidance makes reference to a number of other existing frameworks, and provides examples of how they can be used in the course of implementing the Principles.

"How do the Principles differ from existing frameworks/reporting such as GRI, GBP, EP, ISO, PRI?"
GRI, GBP, EP, ISO, and PRI are specific to either business areas of the bank, specific issues (such as human rights) or reporting. None of these provide an overall framework for the bank at a strategic and portfolio level across business areas that guides banks in their alignment with and contribution to Paris, the SDGs, and society’s goals in general.

“There are a lot of existing frameworks. What do the Principles have to offer?”
The Principles provide a single comprehensive framework to guide banks at the strategic, portfolio and transaction level. Such a framework for the banking industry has been lacking. The Implementation Guidance incorporates many of the existing sustainability frameworks and tools, and suggests how these could be used in implementing the Principles.

“Concern that the requirements under the Principles and future EU regulation will not be aligned.”
The Principles for Responsible Banking and emerging EU regulation o sustainable finance are very much aligned. EU regulators and policymakers are well aware of and in support of the Principles and view them as aligned with their policy goals. In this regard, Valdis Dombrovskis, European Commission Vice President, has encouraged all banks to sign up to the Principles for Responsible Banking. Banks that join and implement the Principles will be well-prepared for emerging EU regulation.

“The PRBs actively undermine the efforts that have been made to bring the financial sector more in line with the Paris Agreement, human rights, indigenous rights, and good governance.”
The Principles are designed to work with and ultimately improve the uptake of existing frameworks. The importance of presenting certain frameworks as the gold standard to which all banks should work towards is acknowledged, and these frameworks will be included in the knowledge and guidance document.

“Reference to the Addis Ababa Action Agenda (AAAA) should be included as a key international agreement that talks about the role of private finance and business in achieving the SDGs.”
We agree with your suggestion, and will ensure that the AAAA is included as a key resource in the knowledge and guidance document.

“Why are the Principles not aligned to the UN Global Compact Principles? ”
The Principles share the same aspiration as the UN Global Compact in respect of driving responsible practices that contribute to the SDGs. The Principles differ in some significant respects: they are directed specifically at banks, and aim to encourage sustainable finance that contributes to sustainable development. The Principles require banks to direct their financing towards not only the achievement of the SDGs, but also the Paris Climate Agreement, while acknowledging that this will be shaped by national and regional contexts.

“Is there a risk of legal claims?”
A legal disclaimer accompanies the Principles for this purpose. Please see details in the Principles Signature Document.

“There should be an independent body that holds signatory banks accountable for their implementation of the Principles.”
We agree that stakeholders’, including civil society organizations’, guidance will continue to be essential to ensure and support the effective implementation of the Principles. To this end, the Core Group will establish an Advisory Body that will include civil society. The role of the Advisory Body will be to provide advice to the Banking Committee, which is the governance and accountability body for the Principles, on proposed amendments to the Principles framework, and on how to assist banks that are struggling to implement the Principles. The terms of reference, which will set out the full functions of this body, are yet to be developed. The goal is to establish the advisory body within 12 months from the signing ceremony.

“What are the consequences for signatory banks that do not fulfil the requirements of the Principles?”
If a bank is not in line with the requirements of the Principles at the end of the four-year period, the UNEP FI Secretariat and the Banking Committee will engage with the bank, and provide support and guidance in order to assist the bank with meeting the requirements. However, sustained and unexplained failure to address shortcomings can result in the bank no longer being listed as a signatory.

“The Principles contribute further to the reporting burden.”
The reporting burden on banks is substantial. The Core Group developing the Principles wanted to limit additional reporting to a minimum. Therefore:
  • Banks do not need to produce an additional report, but should be integrating the required information on their implementation of the Principles into their existing reports;
  • Banks complete the Reporting and Self-Assessment Template with short summary responses and self-assessments, referencing where in their public reports the relevant information can be found.

“It is unclear how the reporting template and the 6 criteria for self-assessment and assurance relate to each other.”
This feedback was received repeatedly. The final Reporting and Self-Assessment Template now integrates reporting and self-assessment & assurance requirements in a logical and clear structure.

“What should our reporting cover?”
Please refer to the Reporting and Self-Assessment Template and the Key Steps to be Implemented by Signatories for detailed guidance on reporting.

“The reporting template is very broad and the questions could be answered in many different ways. Banks will provide links to many different policies and disclosures to ensure adequate reporting.”
The Reporting and Self-Assessment Template has been revised and made clearer based on the consultation feedback received. Nevertheless, the reporting requirements are indeed open enough to accommodate different reporting approaches, contexts and types of banks. While the questions can, intentionally, be sometimes answered in slightly different ways, depending on the respective bank, they should be sufficiently clear and specific to ensure information is comparable.

“The Reporting Template is inadequate in the sense that it does not require disclosures of lending, project financing, guarantees by specific sectors where highest risk may be present.”
The Principles for Responsible Banking require banks to disclose significant impact and exposure at the industry, geography and where relevant even technology level. This will ensure strong transparency on the bank’s financing activities and resulting impacts. A further level of granularity would risk to create an unmanageable reporting burden and potentially conflict with client confidentiality laws.

“The main lack of the Reporting template is that it requires the information at aggregated level which does not allow tracking specific relevant negative impacts of banks activities.”
Further to our response above, reporting on positive and negative impacts is a requirement for signatory banks. Therefore, tracking the progress a bank is making in addressing its negative impacts should be possible, even with disclosures at an aggregated level.

“Proper disclosure and more objective requirements are needed.”
Banks are required to report annually on their implementation of the Principles, material risks and significant impacts, as well as their targets. This involves disclosing KPIs for addressing and reducing negative and increasing positive impacts. Reporting on key elements of the Principles needs to be assured (limited assurance).

“The Principles should seek to build on existing financial disclosures that go beyond the current mandatory directives and regulation.”
The Principles encourage disclosure that exceeds mandatory disclosure requirements. Banks are also expected to take steps to develop their reporting in order to align with current good practice norms for reporting, such as Integrated Reporting, Sustainability Accounting Standards, the GRI, and the TCFD framework.

“How do the GRI and the Principles’ reporting requirements compare? Is reporting under GRI sufficient to fulfill the reporting requirements under the Principles?”
The GRI Standard is a global good practice on reporting. While banks that already report under GRI will have a very strong foundation for their reporting under the Principles, the reporting and self-assessment requirements of the Principles in some aspects go further. More detail on how the information required under GRI and under the Principles compare will be available in the knowledge and guidance document that will be published in September 2019.

“Requirement to submit first reporting within 14 months of signing does not take all reporting cycles/periods into consideration.”
The period for submitting the first reporting has been extended to 18 months from the date of becoming a signatory. Annual reporting will be required subsequent to that.

“We are concerned that we may not be able to fully report on some of the requirements for competition purposes.”
The information provided by a bank in its reporting should not be of a proprietary or sensitive nature. Where reasonably necessary, information can be sufficiently high level in order to avoid divulging competitive or confidential information.

“How will a bank’s assessment of where it can have the most impact be verified?”
In identifying its most significant impacts, a bank is required to show that its analysis included an assessment of the geographies the bank operates in, its main activities/sectors, and the most relevant challenges and priorities related to sustainable development in those sectors and countries. Banks are required to have this information verified by a third-party assurer and publicly report on it.

“Will the verification by accredited reviewers be public and transparent enough for external stakeholders to properly evaluate?”
The outcome of the verification process will form part of the assurer’s opinion, which will be included in the bank’s public report. This has been included in the Key Steps to be Implemented by Signatories document.

“Can we assess whether banks are making progress on a year to year basis?”
Progress over time should be clear as banks should report against the same metrics over time. When changes are necessary they should clearly explain and publish changes made to metrics/the methodology to measure them.

“Assurance for non-financial information is not common practice globally. We are worried this review process adds enormous additional burden.”
Where assurance (limited assurance is sufficient) is not a feasible option for a bank, an independent review may be conducted.

“Is participation by the assurance provider required in the annual feedback and support meeting?”
Following deliberation on this issue, it was decided that participation by the assurer in the feedback meeting between the UNEP FI Secretariat and the bank is not mandatory. Banks may choose to invite the assurer if they wish to do so.

“The Principles introduce an additional cost burden.”
The Principles' 30 Founding Banks acknowledge that the requirement for assurance may carry additional costs. Very small banks (assets under USD 1 billion) will be exempt from this requirement and will only need to provide a self-assessment.

“More comparability across signatories on their implementation of the Principles.”
The benefit of harmonized metrics/methodologies is agreed, however, there are no established metrics/methodologies for banks to report against the Paris Agreement/SDGs. The Reporting and Self-Assessment Template requires a bank to, where possible, directly report against the metric used in the international/national framework to which they are linking their targets, or to use a proxy metric that is widely accepted/can be seen as current best practice.

Furthermore, the banks involved in the initiative are developing methodologies for impact identification and assessment, and for assessing alignment with the Paris Climate Agreement.

“Methodologies need to be developed and more practical examples for implementing the Principles are required.”
The banks involved are working on methodologies to enable them to align with the Paris Climate Agreement and the SDGs. All banks that sign up will have the opportunity to get involved in developing appropriate methodologies and metrics as this is an ongoing process that can be enhanced by exchanging peer expertise and by following global developments on these issues. The Knowledge and Guidance document will be updated every two years (as required) to include progress in metrics, tools and methodologies. Good examples of implementation will be loaded on UNEP FI’s website.

“More support on how to implement the Principles is required.”
When a bank becomes a signatory of the Principles, it also becomes a member of UNEP FI, making it part of a community committed to jointly advancing sustainable banking. As a member of the community you can rely on substantial support to implement the Principles, such as structured peer learning, involvement in developing methodologies, and access to experts.

The annual feedback and support meeting with UNEP FI will be focused on building banks’ capacity, in order to enable them to improve and progress in their implementation of the Principles, and therefore their sustainability performance.

Case studies will be shared in time which will provide examples of how some banks are implementing various aspects of the Principles. These tools should assist banks in their implementation of the Principles.

“Some examples on quantifiable targets set by the participating banks and recommendations from international best practices.”
We have received substantial feedback requesting support for implementing the Principles in general. As stated above, examples and case studies will be shared once banks start reporting on their implementation. Banks will also benefit from being able to engage with the UNEP FI Secretariat and a community of banks on how to approach target setting, and other aspects of implementation.

“To promote additional adoption throughout the banking sector, it is important that a certain form of training and assistance be accessible to all banks, not only to UNEP FI members.”
The Principles have been developed for all types of banks. They are intentionally flexible to enable banks of The knowledge and guidance document will be publicly available. The purpose of this document is to guide banks on how to implement each Principle, it will also be enriched over time to include examples of how leading banks are implementing various aspects of the Principles. While all banks are encouraged to sign up to the Principles, this document will be available to non-signatories as well, therefore enabling them to benefit from this knowledge and improve their sustainability practices.

Training programmes will also be developed, which will be accessible to all banks at a fee.

“The Principles should be translated into more languages to ensure that local communities understand what their banks have signed up to.”
Availability of key information in different languages is indeed important. This will be done as far and as fast as feasible. If institutions would like to support the translation process, please feel free to reach out to the UNEP FI Secretariat.