The Bankers Association of the Philippines (BAP), in collaboration with the World Wide Fund (WWF) for Nature, with support from the German Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), Association of Development Banks for the Asia and Pacific (ADFIAP) and United Nations Economic and Social Commission for Asia and Pacific (UNESCAP), encouraged banks to incorporate environmental, social and governance (ESG) and sustainability principles into their corporate strategy, risk management and bank operations framework.
At the Second Sustainable Finance Forum, held at the Manila Peninsula Hotel last October 9, 2019, BAP President Cezar P. Consing said in his opening remarks that the world’s leading institutional investors are increasingly demanding publicly listed companies to operate on sustainability and ESG frameworks. The Philippine Stock Exchange (PSE) itself has also committed to publishing ESG disclosure guidelines in an effort to gradually assimilate the framework in Philippine companies.
Consing added that in the past few months, sustainability has found powerful proponents in the PSE, and regulators such as the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP), all of whom have introduced guidelines, frameworks, regulations and tools to encourage sustainable lending, business practices and disclosures.
“As economically minded people, we all react to sensible measures. What gets measured gets managed,” said Consing. Consing went on to say that Philippine banks are hell-bent on catching up, despite being behind their ASEAN peers in integrating ESG and sustainability.
The second sustainability forum also underscored the importance of being able to seize the opportunities and understand the costs that come with sustainable development. BAP began promoting ESG through dialogue with advocacy groups and capacity-building entities since 2017.
“Our country lies at the epicenter of climate change. As banks, we must find a win-win situation where we can continue to remain profitable, despite the risks involved in sustainable financing. We all should be part of this transformation journey of creating a resilient economy,” Consing said. “We should make what we do profitable so it can be sustainable.”
The BAP is building a program to assist its members in their respective sustainability journey. Through its partnership with WWF, it will offer guidance to individual banks that want to integrate ESG in their own business models.
“Someday, sustainable finance will be safe and sound banking – redefined,” Benjamin Castillo, BAP Managing Director said in his closing remarks.