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The Principles for Responsible Banking have been designed by a core group of 30 ‘Founding Banks’ together with the UN Environment Programme’s Finance Initiative.
They provide the framework for a sustainable banking system that responds to and drives today’s expanding global sustainable development economy, and guide the banking industry to align itself with society’s goals as expressed in the Sustainable Development Goals and the Paris Agreement.
The Principles support your bank to leverage the forward-looking business opportunities in this new era of sustainable social, environmental and economic development – and to importantly manage emerging risks associated with this new operating environment.
They are purpose-built to serve all banks, regardless of where a bank is based, the type of banking in which it is engaged, and/or its level of experience on issues related to sustainability.
The more banks that adopt the Principles, the greater impact the banking industry will have in leading society to meet its goals for a sustainable, equitable and prosperous future.
The Principles for Responsible Banking officially launched on 22 and 23 September 2019 in New York City during the United Nations General Assembly.
- For banks: The Principles provide banks with a vision linked to society’s goals, and a comprehensive framework for hardwiring sustainability into their DNA at all levels – strategic, portfolio and transactional – and across all business areas.
- For the banking industry: The Principles define, shape and ultimately secure the banking industry’s role in the society and economy of the 21st century, and help the industry to demonstrate how it makes a positive contribution to society.
- For the world: The Principles will accelerate the banking industry’s contribution to achieving society’s goals as expressed through the Sustainable Development Goals and the Paris Climate Agreement.
Over 40% of the banking industry have signed the Principles, and the full list of signatories can be found online. Banks can sign the Principles to join this ever-growing community. Non-bank stakeholders, such as associations, investors, regulators and civil society organizations, can endorse the Principles.
Any bank can become a ‘Signatory Bank’ to the Principles for Responsible Banking. The commitment letter must be signed by the CEO.
The Principles for Responsible Banking define a bank as an entity that has a banking license to take deposits. However, other providers of capital and non-bank lenders may be considered on a case-by-case basis.
Non-bank financial institutions (e.g. banking associations, investment companies, insurance companies, civil society organizations, etc.) can become ‘Endorsers’.
A bank needs to be a member of UNEP FI in order to sign up to the Principles – this provides banks with a growing global network of banks and other financial institutions that have committed to sharing their knowledge, experiences and expertise with Signatory Banks.
They provide your bank with one comprehensive framework for effectively responding to today’s new sustainable development economy across your bank’s entire business – at all strategic, portfolio and transactional levels.
They enable your bank to seize emerging business opportunities in today’s sustainable development economy era, while at the same time enabling your bank to effectively and systematically identify and address related risks.
They promote trust in your bank and ensure that it remains not only relevant and competitive in this new era, but that it increases its value to those that it serves by demonstrating its alignment with today’s sustainable development economy. This includes responding to the evolving needs and rising expectations of clients, customers, employees, regulators and investors.
Providing your bank with direct access to expert knowledge, tools and resources as it continues to strengthen its positioning within the new sustainable development economy.
They are a win-win: they will improve the way you do business, position your bank to succeed in the changing economy and society of the 21st century, and with that benefit your shareholders.
Customers will see a bank that aligns with their values and contributes to their society and future. A bank that a) supports companies that make people’s lives better and b) provides products and services that help build an inclusive society that uses its natural resources sustainably.
Any bank at any stage in any context can become a signatory to the Principles. The Principles provide a clear path for aligning your business practices with society’s goals, regardless of your starting point.
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 Principles for Responsible Investment (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
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.
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.
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.
Updates to the Principles Framework Documents and Guidance Document will be needed over time to reflect changes in society’s needs, the guiding frameworks (UN Sustainable Development Goals 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.