Principle 1: Alignment

“We will align our business strategy to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals (SDGs), the Paris Climate Agreement and relevant national and regional frameworks. We will focus our efforts where we have the most significant impact.”

How your bank can achieve this:

  • Explicitly integrate the SDGs, the Paris Climate Agreement and other relevant national, regional or international frameworks into your business strategy and key business decisions, including your capital allocation decisions.
  • Identify and assess where your banks’ portfolio and service offerings generate, or could potentially generate, the most significant positive and negative environmental, social and economic impacts.
  • In the identified focus areas, set and publish targets that align your business with and ensure your bank’s significant contribution to the objectives and targets set out in the SDGs, the Paris Climate Agreement, and other relevant national, regional or international frameworks.

Implementation Guidance for Principle 1: Alignment

Principle 2: Impact

“We will continuously increase our positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from our activities, products and services.”

How your bank can achieve this:

  • Use the SDGs, the Paris Climate Agreement and other relevant national, regional or international frameworks to identify, assess and be transparent on significant (potential) positive and negative impacts resulting from the bank’s capital allocation decisions and its provision of products and services.
  • Define key performance indicators (KPIs) to address, reduce and mitigate significant negative impacts and to realize opportunities to continuously expand and scale up positive impacts.
  • Undertake forward-looking assessments of sustainability-related risks and opportunities at transaction, portfolio and strategic level and manage and mitigate significant risks.

Implementation Guidance for Principle 2: Impact

Principle 3: Clients and Customers

“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.”

How your bank can achieve this:

  • Systematically identify where your bank can support its clients in reducing their negative and increasing their positive impacts by adopting new technologies, business models and practices and where your bank can encourage and support sustainable behavior and consumption choices among its retail customers.
  • Develop strategies and define measures for the identified focus areas, such as development of new products and services or sustainability-related incentives and contractual conditionality.
  • Help ensure that your retail customers have the knowledge and skills to effectively manage their finances, e.g. through financial literacy programs.

Implementation Guidance for Principle 3: Clients and Customers

Principle 4: Stakeholders

“We will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals.”

How your bank can achieve this:

  • Identify and map key external stakeholders such as regulators, investors, policy makers, and civil society institutions, paying special attention to stakeholders directly or indirectly affected by the bank’s business practices and lending and investment decisions.
  • Engage, listen to and consult with these stakeholders to gather their expectations and advice regarding the material issues in your strategy and business practices. Create partnerships that enable your bank to deliver more than it could by working on its own.
  • Ensure that your engagement with regulators and policymakers is aligned with the goals and objectives of these Principles. Proactively advocate for sustainable regulations and frameworks.

Implementation Guidance for Principle 4: Stakeholders

Principle 5: Governance and Target Setting

“We will implement our commitment to these Principles through effective governance and a culture of responsible banking, demonstrating ambition and accountability by setting public targets relating to our most significant impacts.”

How your bank can achieve this with regards to governance and culture:

  • Assign roles and responsibilities for meeting your bank’s strategic objectives regarding sustainability across all functional areas of the bank and ensure sufficient status, influence and resources.
  • Establish effective policies, management systems and controls to ensure that sustainability objectives and targets are integrated into all decision making processes across the bank.
  • Actively communicate top-level buy-in and integrate performance with regards to the bank’s sustainability targets and responsible banking leadership into performance assessments, remuneration schemes and promotion decisions.

Implementation Guidance for Principle 5: Governance and Culture 

What is required from your bank with regards to target setting:

Implementation Guidance for Principle 5: Target Setting 

Principle 6: Transparency and Accountability

“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.”

Banks are required to:

  • Within the first 14 months of becoming a signatory and every year thereafter be transparent on and accountable for their significant positive and negative impact and contribution to society’s goals and provide information on their implementation of the Principles for Responsible Banking in their public reporting. See the Reporting template.
  • Undergo an annual individual review process whose requirements differ depending on the self-declared “level” of the bank (see review process below and click here to view the “accountability and review processes” section).

Implementation Guidance for Principle 6: Transparency and Accountability

Find out more about the Principles for Responsible Banking