The Sustainable Banking Principles Committee was inaugurated on 20th November 2015 by the Governor of Bank of Ghana, signalling the beginning of work on developing sustainable banking principles and guidelines
ESRM in South Africa
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Pre-implementation activities comprised support for the development of the Nigerian Sustainable Banking Principles (NSBPs) and sector guidelines. ESRM Nigeria has also provided technical training to a consultant network supporting the FIs and also raised awareness on sustainable banking at various levels within the market. A list of activities undertaken each year is provided below.
In South Africa, the sustainable finance agenda is well established with E&S risk management compliance and reporting guidelines in place, which have been published by regulators and industry associations. As societies expectations increase of the role the financial sector plays in promoting good E&S risk management practices amongst clients, the South African ESRM program seeks to support financial institution to enhance their environmental and social risk management systems and disclosure practices.
The ESRM Program in South Africa is supporting regulators, financial institutions and broader stakeholders to broaden the application of environmental and social risk management to all relevant financial products by developing disclosure requirements, as well enhancing the environmental and social risk management skills and resources in the market.
South Africa is one of the most carbon intensive economies in the world. It has sound environmental legislation aimed at achieving sustainable development and the conservation and management of the country’s rich natural resources, including laws that support public participation, impact assessment and environmental management.
As a developing country, South Africa’s infrastructure and society are especially vulnerable to the impacts of climate change and the financial sector has an important role to play in supporting a just transition to a low carbon economy.
Despite the strength of the sector, financial institutions face a broad range of challenges in South Africa, including high levels of unemployment, ageing infrastructure, electricity shortages and one of the world’s highest GINI coefficients.
The Nigerian Environmental and Social Risk Management (ESRM) program, previously called the Environmental Performance and Market Development (EPMD) program, was formally initiated in 2013, building on the findings of a 2008 study conducted by IFC’s Independent Evaluation Group (IEG) on ‘Improving Results in Sub-Saharan Africa (SSA)’, which showed that Financial Institutions in the region did not achieve satisfactory Environmental, Social, Health and Safety ratings. The top three constraints to achievement were identified as: