The Kenya Commercial Bank (KCB)KCB and 28 other global banks boasting of 17 trillion US dollars in combined assets on November 26 launched the Principles for Responsible Banking in Paris, France.
Over 12 CEOs attended the launch of the Principles to initiate public participation during the first day of the Global Roundtable meeting.
The Principles will define the banking industry’s role and responsibilities in shaping a sustainable future. The six principles selected (alignment, impact, customers and clients, stakeholders, governance and culture, transparency and accountability) speak to 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.
KCB in a statement to newsrooms said it has been actively involved in the drafting of the Principles alongside other global banks over the last eight months.
Speaking at the launch of the principles, KCB Group CEO Joshua Oigara said that his organisation believes in responsible business which according to him is about establishing and nurturing the foundation of growth for the next generation.
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. They agree 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.
“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. KCB Group believes that these principles will create a path towards achieving sustainable financial success and widen the door to financial freedom.” added Mr. Oigara.
By developing the set of principles, the 28 founding banks set out a clear purpose for the banking industry itself aimed at enabling investors, policy makers, regulators, clients and civil society to compare banks and hold them accountable for their environmental, social and economic impacts and their contribution to society’s goals.
Signing the Principles will be a serious commitment: 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 said: “The global banking industry is stepping up to the sustainability challenge. 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.”
The Principles are now entering a six-month global public consultation period before they will being signed by banks from around the world at the United Nations General Assembly in New York in September 2019.
Banks and stakeholders around the world are invited to provide feedback and input to guide further development of the principles. They have also been encouraged to support the agreement by becoming Endorsers of the Principles for Responsible Banking.