Ten banks launch sustainable finance manifesto

Lenders including Societe Generale, Yes Bank and ING back ‘positive impact principles’ to scale up clean energy investments

(credit: Flickr)

(Flickr/J J)

By Alex Pashley

Banks are critical to catalysing a multi-trillion dollar transition to a green economy, but not enough cash is flowing.

So says the UN environment body (UNEP), which with ten banks worth US$4 trillion released a manifesto on Tuesday to boost finance with social ends.

Chasing the highest short term returns, lenders have little appetite for funnelling funds into risky investments that tackle climate change and poverty.

The “Positive Impact Manifesto” signed by the likes of French lender Societe Generale, Africa’s Standard Bank and Australian fund Westpac seeks to reverse that.

Report: Climate change threat demands reform to financial system, says UNEP

Countries are set to sign a new global warming agreement this December and last month agreed global development goals for 2030.

“Banks are uniquely positioned between the real economy and capital markets,” said UN environment chief Achim Steiner in a statement.

“The Manifesto is a clear and welcome call for the active participation of the banking sector to play their part in addressing the $5-7 trillion annual financing needed to achieve the Global Goals.”

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The group intends for banks to honour the principles from 2017, after testing out the altered business models next year.

The initiative addressed the challenge of “reconcil[ing] market forces and sustainability imperatives,” said Herve Guez, a board member of UNEP’s finance initiative investment commission.

For Christopher Bray of UK lender Barclays, the approach held a “lot of promise in terms of new business opportunities, whilst continuing to help in countering a build-up of environmental and social risk.”

Read more on: Climate finance