Defining Responsible Banking: A guidance for banks
The United Nations Environment Programme Finance Initiative (UNEP FI) has released a guidance for banks on implementation of six Principles for Responsible Banking: alignment; impact & target setting; clients & customers; stakeholders; governance & culture; transparency & accountability.
Key takeaways for boards:
- The guidance requires setting and publishing specific, measurable targets in at least two significant impact areas within four years, and boards can lead on making the company accountable for its sustainability progress.
- Directors can help companies establish effective sustainability governance structures with clear executive accountability and integrate sustainability objectives into remuneration and performance reviews.
- Boards can oversee the development of action/transition plans with concrete milestones to meet sustainability targets around climate, nature, and human rights commitments.
- The guidance highlights the importance for banks to implement proper sustainability risk management structures, such as risk committees.
- Board directors can be crucial in guiding strategy development that aligns with major international frameworks like the SDGs and Paris Agreement, making sustainability central to bank’s core business strategy rather than a peripheral concern.
Read the full guidance here
Principles for Responsible Banking Implementation Journey – Defining Responsible BankingRelated Content
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Transition Planning = Strategy Planning
The past twelve months have highlighted how companies are not only increasingly experiencing the impacts of climate change but also how they are powerfully positioned to be agents of change, with the ability to curb these impacts and promote long-term sustainability and resilience for the global economy and for society. The need to decarbonise and to achieve net zero commitments is being driven by a range of economic, regulatory and market factors, all of which require companies to respond faster than ever before.
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