The impacts that banks can create on issues such as energy finance, empowerment of women through supporting women entrepreneurship, have critical importance in building a sustainable future.
Two thirds of global finance is being provided by banks worldwide. Therefore, transformation in the finance sector has a great potential for contributing to the Sustainable Development Goals (SDGs) such as Climate Action, Gender Equality, Affordable and Clean Energy, as well as the goals of Paris Agreement, which is based on tackling climate change. The impacts that banks can create on issues such as energy finance, empowerment of women through supporting women entrepreneurship, have critical importance in building a sustainable future.
United Nations Environment Programme – Finance Initiative (UNEP FI) is a partnership between United Nations (UN) Environment and the global financial sector created in wake of the 1992 Earth Summit held in Rio de Janeiro to promote sustainable finance. More than 230 financial institutions, including banks, insurers, and investors, work with UN Environment to understand today’s environmental, social and governance challenges, and to understand how to achieve sustainable development. By fostering country-level dialogues between finance practitioners, supervisors, regulators and policy-makers, and, at the international level, promoting financial sector involvement in processes such as the global climate negotiations, UNEP FI’s work also includes a focus on policy.
The main motivation for the establishment of the initiative was the idea that transformation in finance sector would make a significant contribution to sustainable development. The vision was carried one step further with UNEP FI meeting held in Paris on November 26th and “Principles for Responsible Banking” were declared. The Principles are expected to become an effective tool for managing the environmental, social and governance risks the finance sector has the most impact on. Thus, the Principles will serve as a directive in achievement of the aims of Paris Agreement and Sustainable Development Goals. The Principles were established by the joint efforts of 28 banks, total assets which exceed USD 17 trillion. Garanti BBVA Bank was the only bank from Turkey that partook during the process of establishing the Principles. BBVA Group, majority shareholder in Garanti BBVA, was also among the signatories of the Principles.
For a more prosperous, inclusive, flexible, and sustainable world, the SDGs propose a roadmap to pave the way to create value. In the context of Sustainable Development Goals, “common value” represents gathering of existing potential social expectations and policy implementations in order to determine a sustainable and inclusive road for ensuring economic development and reaching a higher welfare level. Principles focusing on six main areas, that are Compatibility, Impact, Clients & Customers, Stakeholders, Governance and Target Setting, and Transparency & Accountability, constitute the basic framework for sustainable banking systems, which is an important tool in reaching the SDGs.
The process for establishing the principles still continues. The Principles for Responsible Banking Working Group will continue to collect suggestions and comments until May 31st, 2019. The Principles will be signed with the participation of volunteering banks worldwide following United Nations General assembly to be held in September 2019.
Regarding this significant step, Ali Fuat Erbil, the CEO of Garanti BBVA, stated “It has always been of utmost importance for us to positively contribute to our country and the society at large, through achieving many firsts in our market. Hence, we aim creating value for all our stakeholders including our customers and employees. We believe that the Principles on Responsible Banking will guide us in taking the successful initiatives we have carried out so far, a step further. The principles will also give us the opportunity to credibly demonstrate our concrete actions to create a better world. We are proud to be one of the decision-makers of this historic movement to build a better future and representing Turkey at the global level. We hope to set an example and encourage other players in the market with the actions that we undertake as part of the Principles for Responsible Banking. We wish all other banks operating in our country participate in this important initiative and be a part of the change”.