About a third of the global banking sector has signed onto the United Nations’ initiative to promote sustainable banking, with limited participation from Canada.
The UN formally launched the Principles for Responsible Banking at the UN Climate Action Summit in New York on Monday, with 130 banks from around the world committing to aligning their businesses with the goals of both the Paris Agreement on Climate Change and the UN’s Sustainable Development Goals (SDGs).
The founding signatories collectively represent US$47 trillion in assets in 49 countries, but only include a couple of major Canadian financial institutions — National Bank of Canada and Desjardins Group.
The principles were developed by a core group of 30 banks working with the UNEP Finance Initiative, which is a UN-private sector collaboration. They are backed by an implementation framework that sets out accountabilities and requires banks to set and work toward specific targets.
“A banking industry that plans for the risks associated with climate change and other environmental challenges can not only drive the transition to low-carbon and climate-resilient economies, it can benefit from it,” Inger Andersen, executive director of the UN Environment Programme (UNEP), said in a statement.
“When the financial system shifts its capital away from resource-hungry, brown investments to those that back nature as solution, everybody wins in the long-term,” Andersen added.
One of the initial signatories, Swiss banking giant UBS AG said that the principles will provide it with a framework to identify new business opportunities in the emerging sustainable economy, while also identifying and addressing related risks.
“Now we have a clear framework that allows us to benchmark ourselves against ambitious targets. As an industry, it’s of increasing importance to all go in the same direction and speed up efforts to support the UN SDGs,” said UBS group CEO, Sergio Ermotti.