This month marked a historic moment for the Principles for Responsible Banking (PRB). Banking industry leaders and civil society representatives from across the globe came together to discuss the progress made so far by signatories and their strategic vision for the framework in the next stage of its implementation.
A meeting of minds
The first ever in-person meeting of the UNEP FI Banking Board and the PRB Civil Society Advisory Body took place on Wednesday 10 May, after a delay of almost two years due to the Covid-19 pandemic. Topics on the agenda included assessing progress made by member banks ahead of publication of the second Progress Report later this year and guiding the new PRB 2030 process, which will determine the future strategic direction.
Balancing speed with control
While the progress made to-date was recognised, the Civil Society Advisory Body challenged the Banking Board to encourage signatories to move faster in delivering their contribution to addressing the most urgent global crises – climate change, nature loss, social justice and financial inclusion. In progressing with targets beyond climate, civil society representatives also stressed the need to avoid de-prioritising climate action.
The meeting provided an opportunity for Board members to share some of the practical challenges faced by the industry which are adding further complexity to the implementation landscape, such as increased regulation, resourcing and knowledge-building challenges, managing legal risk and the need for controlled delivery.
Pursuing real-world impacts and recognising diversity
The PRB 2030 initiative is a process which is seeking to ensure effective delivery of impacts and the continued leadership role of PRB signatories as they shape the future of banking. The Civil Society Advisory Body suggested the following key strategic areas of focus: sustainable finance and engagement alongside wider financial ecosystem players; the intersectionality of impact areas; and effective client engagement. Representatives also urged the Banking Board to focus efforts on measurable impact, on enhancing ambitions in alignment with global standards, and on harmonisation of core metrics to provide stronger progress indicators.
As the world’s foremost sustainable banking framework, the PRB has over 300 signatory banks representing approximately half of the global banking industry. This coverage is undoubtedly a strength of the framework. However, responding to a diverse range of regulatory, supervisory and cultural approaches to sustainable banking is a challenge raised by both bodies, and one which will require support.
A challenge to inspire
The Banking Board was challenged to continue to inspire the industry with ambitious standards and push forward with courage, while maintaining credibility through robust accountability processes and regional inclusivity.
The two governance bodies will continue to work together on setting the vision for the Principles as we look to 2030 and supporting signatory banks in building their capacity to create real world impact. Following the meeting, Banking Board and Civil Society Advisory Body feedback on the PRB 2030 vision, objectives and deliverables will be discussed at the next PRB 2030 Core Group meetings in May and June 2023, where the future vision statement will be agreed. The ongoing drafting process for the second Progress Report will reflect the feedback received from the Civil Society Advisory Body at the recent meetings. The Civil Society Advisory Body will provide its own, written independent view on progress and priorities within the published second Progress Report, to be finalised later this year.
“Proactively inviting civil society advice once again proved to be a constructive and valuable experience. There is no doubt that the PRB framework is all the better from the advice we receive.” Siobhan Toohill, Co-Chair of the Banking Board and Chief Sustainability Officer, Westpac Group
“I was encouraged by the degree of alignment on where PRB needs to go. But there is still much work to be done to keep up the need for greater urgency, ambition, and execution.” Daniel Saccardi, CSAB Chair, Programme Director, Company Network, Ceres