As one of the initial endorsers of the UNEP FI Principles for Responsible Banking, the European Association of Co-operative Banks welcomes the possibility to bring comments in the framework of the stakeholders consultation that closed on 31 May. Moreover given the importance of the Initiative, the EACB has organized on 24th May a workshop on Sustainable Finance during which the UNEP FI Principles were discussed thoroughly offering a platform for exchanges between UNEP FI and EACB Members, in addition to this written contribution (an educational webinar will follow in the next months).
The 6 Principles cover globally the main operations for a Bank to be sustainable: 1. a strategy/ambition of contributing to society’s goals (mitigating negative impacts and enhancing positive ones); 2. a risk assessment process that includes ESG risks; 3-4. a stakeholders dialogue that challenge the business model and, in addition, a focus on clients to encourage and support their own CSR approaches. The last two Principles are focused on the internal governance and the accountability, to be able to reach the first four Principles.
We welcome the announced streamlining of the implementation guidelines presented in the updated consultation document, that propose to delete the creation of different “maturity level” starting point and widens the period given to banks to conclude the first assessment on the integration of the Principles (4 years after the endorsement of the initiative). We support this new approach and encourage further simplification in the development of the implementation guidance. Moreover, as it would be rather difficult for small and medium–sized banks to apply for the Principles, we suggest a simplified approach that will allow them to join the Initiative, without disproportionate burdens.
In our opinion, the main issue that the implementation guidance has to consider is the availability of clients’ data, which become even more relevant when we take into account that a large amount of clients is represented by MSMEs (in Europe there are 23 million of Micro, Small and Medium-Sized Enterprises, that represent the 98% of businesses) and retail customers. In this regards, the aim of the UNEP FI Principles to support sustainable alignments of corporate and customers may probably raise some challenges.
Finally, the EACB believes that the Implementation Guidance shows a comprehensive view of international frameworks and tools that already exist, in line with the Principles. However, this wide-range of initiatives could be too complex especially for small and medium-sized banks. Even if we are aware that, in the updated document, the three different levels for the implementation of Principles will be deleted, it would be helpful for banks which are at a starting point to have further guidance and guidelines on positive environmental, social and economic impacts.
For the full EACB answer to the UNEP FI consultation please click here.