Nearly 20 leading global banks and investors have today launched what is being claimed as the first of its kind set of criteria for investments to be considered sustainable – with the backing of the United Nations and the French government.
The four criteria – called the Principles for Positive Impact Finance – aim to provide financiers and investors with a global framework applicable across their different business lines, including retail and wholesale lending, corporate and investment lending and asset management.
The four principles are 1) Definition 2) Frameworks 3) Transparency 4) Assessment.
“The Principles are applicable to all forms of financial institutions and financial instruments,” says the UNEP Finance Initiative, the arm of the UN that convenes finance for the environment.
The principles build on and complement existing frameworks, such as the UN Global Compact, the Equator Principles, the Principles for Responsible Investment and the Green Bond Principles.
The principles have been drawn up by the UN initiative’s Positive Impact Working Group, whose members include heavy hitters like BNP Paribas, Société Générale, Hermes, Westpac and ING (full list below).
The project has the backing of the French government, with Finance Minister Michel Sapin saying they are a “timely initiative from the finance sector”. They demonstrate the willingness of financial institutions to go beyond current practices and to contribute to foster a more sustainable development.”
“Achieving the Sustainable Development Goals – the global action plan to end poverty, combat climate change and protect the environment – is expected to cost $5-7trn every year through 2030,” said Eric Usher, head of the UN Environment Finance Initiative. He called them a “game changer” in channelling the assets managed by banks and investors towards clean, low carbon and inclusive projects.The principles are an “ambitious yet practical” framework said SocGen Deputy CEO Séverin Cabannes.
The Principles do not prescribe a single method for achieving positive impact, but they require that appraisal processes and methodologies be transparent.
“A timely initiative from the finance sector” – Sapin
They are part of a broader process under the Positive Impact Manifesto, launched in 2015 to call for a new, impact-based financing paradigm to bridge the gap in financing for sustainable development.
The principles, said ING’s Paul-Emmanuel Aaerts, Head of Wholesale Banking France, are “an ambitious and necessary new milestone on the road to a greener and more inclusive economy”.
PRI Managing Director Fiona Reynolds called them “an important tool for investors to frame their positive contribution to the environment, the society and the economy”. Link
Positive Impact Working Group includes:
Australian Ethical
Banco Itaú
BNP Paribas
BMCE Bank of Africa
Caisse des Dépôts Group
Desjardins Group
First Rand
Hermes Investment Management
ING
Mirova
NedBank
Pax World
Piraeus Bank
SEB
Société Générale
Standard Bank
Triodos Bank
Westpac
YES Bank
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