KCB Group and 28 other global banks have launched the Principles for Responsible Banking in Paris, France, in an event attended by over 12 CEOs.
The Principles are meant to define the banking industry’s role and responsibilities in shaping a sustainable future, according to a statement sent to newsrooms.
The six principles selected (alignment, impact, customers and clients, stakeholders, governance and culture, transparency and accountability) will address banking business and culture aligned to Climate Change, Sustainable Development Goals (SDGs), and relevant national and regional frameworks themes.
“The Principles set the global standard for what it means to be a responsible bank and will ensure that banks create value for both their shareholders and society. They provide the first global framework that guides the integration of sustainability across all business areas of a bank, from strategic, portfolio to transaction level,” read the statement in part.
By signing the Principles for Responsible Banking when they are launched in September 2019, banks will commit to being publicly accountable for their significant positive and negative social, environmental and economic impacts.
Through the principles, banks will be required to set public targets on addressing their most significant negative impacts and scaling up their positive impacts to align with and contribute to national and international sustainable development and climate targets.
KCB Group CEO and MD Kenya, Joshua Oigara says that the principles will set the agenda in future banking.
“We believe responsible business is about establishing and nurturing the foundation of growth for the next generations. To succeed, banks need to bring their written policies into action through strategy for creating long-term value through sustainable banking. These principles will create a path towards achieving sustainable financial success and widen the door to financial freedom,” he said.
Banks that continuously fail to meet transparency requirements, set adequate targets and demonstrate progress will face removal from the list of signatories.
Satya Tripathi, UN Assistant Secretary-General, UN Environment hopes that the new development be a game changer in the banking industry.
“I’m optimistic we’ll see a realignment of business practice – one that embraces the fact that green and socially responsible business is the best business,” says Tripathi.
The Principles are now entering a six-month global public consultation period before they will be signed by banks from around the world at the United Nations General Assembly in New York in September 2019.
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