The Principles for Responsible Banking, much more than a declaration
In this op-ed, published in Spanish newspaper Cinco Días, Antoni Ballabriga, global director of Responsible Business at BBVA and cochair of the UNEP FI Steering Committee, analyzes the impact of the Principles of Responsible Banking in their first anniversary.
One year since the birth of the Principles for Responsible Banking, promoted by UNEP FI, the financial industry’s alliance with United Nations. It serves as a frame of reference for banks that are committed to using their activity to help create a positive impact on the lives of people and societies as a whole. The principles have been signed by 189 banks in 54 countries, with more than $53 trillion in assets, representing over 40 percent of the global banking system. In Spain, Abanca, Bankia, Bankinter, BBVA, CaixaBank, Ibercaja, Kutxa, Sabadell and Santander are signatory banks.
This year has demonstrated the important role that banks play in society, accompanying our customers during these hard times, amplifying government response programs and working in partnership with our stakeholder groups on our societies’ needs, especially those of the most vulnerable. In this sense, the crisis has been an opportunity to show banks’ genuine commitment to the spirit of these principles.
A year in which, despite this extraordinary crisis, important initiatives have been launched such as the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) network publications with over 60 central banks, the European Banking Authority’s action plan or the ECB’s proposed expectations.
A year in which banks have also accompanied these regulatory initiatives with very significant steps, all of which in the framework of implementing these six principles.
Second, by ensuring that the social and environmental impact is managed in those more sensitive areas, setting ambitious targets. Dozens of banks now have objectives to mobilize sustainable financing. Furthermore, 38 of the principles’ signatory banks have gone a step further and we will set decarbonization targets by September 2022 with the Collective Commitment to Climate action. A commitment that was also promoted by the Spanish Banking Association (AEB) and the Spanish Confederation of Savings Banks (CECA) at COP 25 to which banks representing 95 percent of the sector in Spain also joined.
In terms of the third principle regarding the relationship with our clients, banks have also been developing financial and non-financial solutions to accompany them in this transition. Solutions that are starting to become relevant in the wholesale market and which are advancing progressively to help SMEs and all people.
Signatory banks have also advanced in our dialogue with our stakeholder groups (fourth principle), especially with regulators, supervisors and civil society organizations. In this regard, the creation of the Civil Society Advisory Board, which will be a body that will provide UNEP FI a contrasting independent view for the implementation of the principles in key areas like climate change, biodiversity and ecosystems, human rights, poverty, social inclusion and transparency. This board, unique in initiatives of this kind, will be established at the end of 2020 and will pose a fundamental component that gives the Principles for Responsible Banking greater credibility.
Fifth, in relation to governance, more and more banks are including sustainability on the agenda of their governing bodies and management committees.
And finally, significant progress has also been made regarding transparency (the sixth and final principle). Many banks have already been reporting their advances, all of which we must include in our 2020 annual reports, indicating the progress that has been made and plans for full implementation.
The Principles for Responsible Banking serve as an actual guide with very concrete, very ambitious steps that are also very different from other collective initiatives
Thus, the Principles for Responsible Banking are more than a declaration. They serve as an actual guide with very concrete, very ambitious steps that are also very different from other collective initiatives in order to help banks in their individual transformation journey toward a responsible and sustainable banking model.
Banks play a key role in society. Our success and our ability to continue being profitable and relevant is intrinsically dependent on the prosperity of the societies we serve over the long-term. We believe that our clients, users, and our businesses can only prosper in an inclusive society based on human dignity, equality and the sustainable use of natural resources. Therefore, with these principles, we want to assume a leading role and promote our products, services and relationships in order to support and accelerate the fundamental changes that are needed in our economies and lifestyles so that current and future generations can achieve a shared prosperity.
We still have a long way to go. With the Principles for Responsible Banking and with the support of the United Nations, the groundwork has been laid for a responsible banking system that is geared toward society’s objectives. A great declaration, yes, but also a concrete and real framework to respond to all of our stakeholder groups and give a genuine response to banks’ role in society.
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