The new initiative provides benchmarks that will enable greater integration of climate related considerations into both lending and advisory activity by an unprecedented coalition of the world’s leading financial institutions.
The Principles intend to make climate change considerations a core component of how financial institutions conduct business, parallel to and in addition to the necessary development of appropriate regulatory and enabling environments at the domestic and international levels. They imply a shift from incremental financing of climate activities to ensuring that climate change – risk and opportunity – is a fundamental consideration through which financial institutions deploy capital.
The Principles highlight practical, operational approaches to integrate climate into the core investments and advisory functions of a financial institution.
They outline how financial institutions can:
- Commit to climate strategies,
- Manage climate risks,
- Promote climate smart objectives,
- Improve climate performance,
- Account for climate action.
These Principles have been developed based on practices implemented by financial institutions worldwide over the last two decades. A related publication also released today compiles emerging practices illustrating some of the many ways financial institutions currently integrate climate change considerations into their core activities.
The landmark move was undertaken by 26 public and private financial institutions, from both developing and developed countries:
- African Development Bank Group,
- Asian Development Bank,
- Agence Française de Développement,
- BNP Paribas,
- Development Bank of Latin America – CAF,
- Caisse de Dépôt et de Gestion – Morocco,
- Caisse des Dépôts Group,
- Crédit Agricole S.A.,
- Development Bank of South Africa,
- European Bank for Reconstruction and Development,
- European Investment Bank,
- FMO Entrepreunerial Development Bank,
- HSBC,
- Inter-American Development Bank,
- International Bank for Reconstruction and Development,
- International Finance Corporation (IFC),
- Industrial Development Bank of India,
- Industrial Development Bank of Turkey,
- Japan International Cooperation Agency – JICA,
- KfW Group,
- Malaysia Credit Guarantee Corporation,
- Multilateral Investment Guarantee Agency – MIGA,
- Nordic Development Fund,
- Proparco,
- Société Générale,
- YESBank
By signing the voluntary principles, the financial institutions, together representing more than $11 trillion, are pledging to continue to integrate climate considerations into their investments and advisory functions, in an effort to scale up their efforts to address climate change.
Other institutions are being invited to take part in this initiative, as part of a collective responsibility to incorporate climate change considerations throughout their operations.