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20th September 2019
Industry pledges support for the UN's 'principles for responsible banking'
UK Finance has announced its support for the United Nations Environment Programme Finance Initiative’s ‘Principles for Responsible Banking’. The Principles align banks with society’s goals as expressed in the UN Sustainable Development Goals (SDGs) and the Paris Climate Agreement.
They set a global benchmark on responsible banking and provide actionable guidance on how to achieve this. The Finance Initiative’s ‘Principles’ reflect the concept of social purpose and the need for businesses and society to view addressing the growing threat of climate change and sustainability as an imperative.
Since the financial crisis, banks across the globe as well as in the UK have undergone significant restructuring, incorporating reviews of their culture and arrangements for board oversight and direction whether through an expanded remit for the organisation’s risk committee or a designated committee for reputation, sustainability, brand values or an equivalent.
This aligns with changes in UK corporate governance and company law combined with requirements for ‘non-financial reporting’ resulting in more emphasis on longer term drivers of value in company reporting. Alongside financial stability and conduct, strategic purpose – defined by reference to broader stakeholder interests – has led to there being further thinking.
The UN General Assembly will name UK Finance as one of the leading banking organisations pledging its support for the Principles in New York this weekend.
Commenting, Stephen Jones, CEO of UK Finance said: “Environmental risk and opportunity is beginning to reshape the way we look at business planning and economic growth. A broad base of stakeholder interests, from regulators, to investors, employees and customers are increasingly challenging the banking and finance to find more innovative and sustainable ways in which to operate.
“There are real implications for firms, be it product innovation, bringing environmental and other sustainability factors into lending decisions and even the frequency of corporate travel. Endorsing the Principles firmly aligns with our vision for corporate performance, including within banking and finance, being determined by reference to broader, longer term and more sustainable drivers of value.”