In a major step forward for the UN’s Principles for Responsible Banking, its current signatories and members of UNEP Finance Initiative (UNEP FI) have voted for a new governance structure, agreed individual and collective progress review processes, as well as a process for dealing with signatories who fail to deliver on their commitments. The new governance body, to be known as the Banking Board, will oversee the effective implementation of the Principles for Responsible Banking. To ensure the credibility of the new framework, a civil society advisory body will be created to help monitor collective progress, advise the Banking Board on strategic matters and help maintain the relevance of the framework.

“The outcome of the vote reflects the importance that the global banking community places on its role in tackling climate change, contributing to the UN Sustainable Development Goals, and driving a sustainable post-Covid-19 recovery. It sends a powerful signal to stakeholders that the banks take their responsibilities seriously and are truly committed to implementing the Principles for Responsible Banking,” said UNEP FI Head, Eric Usher.

With the Individual Review Process, each bank will be held accountable for demonstrating progress in line with the commitments it has made as a signatory. From 2021, UNEP FI will annually review each bank’s reporting against the requirements set out in the official Principles for Responsible Banking Framework documents: the Key Steps to be Implemented by Signatories and Reporting and Self-Assessment Template. The results will enable UNEP FI and the Banking Board to identify which banks need additional guidance and support to successfully deliver on their commitments. If despite the support and guidance provided, a bank is consistently unwilling or unable to address the shortcomings, the Banking Board can decide to no longer list the bank as a signatory.

“Of great value to signatory banks, is the unique opportunity to get customised and expert feedback and advice on the bank’s PRB journey from the individual review process,” said Wendy Dobson, Head of Group Policy, Advocacy and Sustainability in Group Risk, Standard Bank, South Africa and co-Chair of UNEP FI’s Banking Committee.

Taking their accountability to society and stakeholders as well as their commitment to “consult and engage” with civil society seriously, signatories have agreed to take a step no other sustainable finance framework has taken to date – establish a Civil Society Advisory Body. The Body will comprise twelve organizations from every region around the globe with expertise in the most relevant social and environmental issues. One of its key roles will be to monitor and provide an independent view on the collective progress of signatories to the Principles for Responsible Banking. The Body’s independent assessment will be published as part of the UNEP FI’s biennial Collective Progress Report on the Principles. Furthermore, the Civil Society Advisory Body will be tasked with helping to keep the framework in step with evolving global sustainability objectives and advising the banks on updates to the Principles for Responsible Banking framework documents and requirements. Later this year, a public call will be issued for applications inviting civil society institutions from around the world to declare their interest in becoming a member of this Body.

“We know that with the challenges we face today, collaboration is essential. Having seen the value of engaging directly with civil society groups in the development of the Principles, we’re now proud to take the step to establish a formal Civil Society Advisory Body, supporting constructive dialogue between banks and civil society, with a shared goal of better sustainability performance,” said Siobhan Toohill, Group Head of Sustainability, Westpac Group, Australia and co-Chair of UNEP FI’s Banking Committee.

Complementing robust accountability with support, guidance and collaboration, UNEP FI’s banking members have agreed to provide substantial additional budget for an extensive support structure – this entails individual feedback and guidance for banks, targeted peer learning, and the joint development of tools and guidance in six Working Groups focusing on key aspects of implementing the Principles for Responsible Banking.

About the Principles for Responsible Banking

The Principles for Responsible Banking are a unique framework for ensuring that signatory banks’ strategy and practice align with the vision society has set out for its future in the Sustainable Development Goals and the Paris Climate Agreement.

More than 180 banks have now joined this movement for change, leading the way towards a future in which the banking community makes the kind of positive contribution to people and the planet that society expects. These banks represent more than a third of the global banking industry.

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Contact: Sally Wootton