The six responsible banking principles global society needs
On September 22, the Principles for Responsible Banking were signed during the United Nations General Assembly in New York. These principles were conceived a year ago in Paris thanks to the initiative of 28 financial institutions working together under the framework of the United Nations Environment Programme – Finance Initiative (UNEP FI). BBVA was one of the founding banks. To date, 130 CEOs from financial organizations around the world have signed the principles.
One of the fundamental goals of the Principles is to define the banking industry’s role and responsibilities in creating a sustainable future, aligning it to the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement, which was adopted in 2015 and entered into force in 2016. Meanwhile, the UNEP FI emerged in 1992 as an alliance between the United Nations and the private sector with the objective of positioning sustainability at the forefront of financial institutions’ business strategies. Today, it comprises more than 240 financial institutions worldwide.
UNEP FI organizes biennial round tables that set out the sustainable agenda for the international financial community and establish the key criteria that determine what it means to be a responsible bank. The UNEP FI activities, together with the 2016 adoption of the SDGs — which aim to end poverty, protect the planet, and ensure everyone enjoys peace and prosperity — and the world action plan to limit global warming adopted the year before at the Paris conference on climate, have served to define the six Principles for Responsible Banking. Participating institutions commit to embracing sustainability.
The six principles are:
- Alignment. Participating entities commit to aligning their business strategies with the objectives expounded in the SDGs and the Paris Agreement.
- Impact and target setting. They commit to increasing the positive impacts and decreasing the negative impacts of their business activities, concentrating on those areas where the impact is most significant.
- Clients and customers. Signatories will work responsibly with their clients and customers in order to develop sustainable practices and foster shared prosperity for both current and future generations.
- Stakeholders. They commit to proactively consult, engage, and partner with relevant stakeholders to achieve society’s goals.
- Governance and culture. The participating institutions will set public objectives and will implement them through an effective system of governance and a culture of responsible banking, seeking to address the most negative impacts that result from their business.
- Transparency and responsibility. The implementation of these principles will be reviewed periodically, thus participants commit to transparency and assuming full responsibility for positive and negative impacts.
BBVA's firm commitment
"These principles are the way forward in affirming our contribution and redoubling our commitment. Banks play a significant role in sustainable development because we are the ones who can channel the funds that finance sustainable activities,” BBVA’s Executive Chairman Carlos Torres Vila resoundingly expressed support for the UNEP FI Principles for Responsible Banking. According to the executive chairman, this initiative “is redefining the industry's role in society and aims to produce a positive impact for everyone.”
The Group is aware that the finance sector must respond to societal demands and needs — as is happening with the environment and the global role of business. Consequently, the bank intends to assume a leadership position in this area, using its products, services, and relationships in order to hasten and support the fundamental economic and lifestyle changes that are necessary in order to achieve shared prosperity with both current and coming generations.
Carlos Torres Vila maintained that, “The Principles for Responsible Banking will help us be better banks and reinforce the entire financial system's sustainability. The future of banking lies in financing the future.”
In addition to the Principles for Responsible Banking, BBVA signed the Collective Commitment for Climate Action, which was launched under the framework of the United Nations climate summit. Thirty-one international financial institutions signed up to the objective of aligning their products and services with the fight against the climate emergency. This commitment represents another step forward, making progress beyond timelines and objectives, going further than a declaration of principles.