New York, 22 September 2019 – The United Nations launched the Principles for Responsible Banking with the sign up of 130 international banks, collectively holding more than USD 47 trillion in assets. As the banking sector provides over 90 per cent of financing in developing countries and over two thirds worldwide, global action from the industry is a crucial step towards meeting the sustainability imperative.
THE PRINCIPLES FOR RESPONSIBLE BANKING
By endorsing the Principles, banks commit to align their business models and scale up their contribution to achieving the goals set out by the the Six Principles developed by the United Nations Environment Programme Finance Initiative (UNEP FI) and a core group of 30 founding banks provide a common comprehensive framework. It enables set up and work towards the achievement of, meaningful targets for more responsible banking. The signatories are also committed to an accountability duty, reporting publicly on the reduction of their risks while supporting economic and social transformation.
Alongside the Principles, other initiatives have emerged, aimed at solving the challenge of standardised approaches for managing sustainability risk and, enhancing sustainability-related disclosures. For instance, the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) has developed a framework for effective reporting on climate-related financial risks. The UK Prudential Regulatory Authority has clearly stated its expectation that firms should consider engaging with the TCFD framework and other initiatives in respect of disclosures. The Central Banks and Supervisors Network for Greening the Financial System (NGFS) also encourages financial institutions to follow the TCFD recommendations.
MAZARS ACTING WITH YOU
At Mazars, we strongly believe the banking industry has an indisputable role to play in building a more sustainable future. Significant changes must take place, and have already started to happen in policies and regulations, technologies, and consumer behaviours. Banks should act now to manage the new risks associated with these changes and seize the opportunities offered by this transition. If you would like to implement the Principles or discuss other ways to make your business more sustainable, please do not hesitate to get in touch.