MANILA, Philippines — Banks and other supervised financial institutions have been given three years to incorporate sustainability principles in their operations, according to the Bangko Sentral ng Pilipinas.
BSP Governor Benjamin Diokno said the regulator is currently engaging banks in discussions to help them identify and execute specific actions on the implementation of Monetary Board-approved strategies and policies on the integration of sustainability principles into their strategic objectives, corporate governance, risk management systems, and operations.
“We recognize that the tone at the top is of vital importance in materializing a bank’s sustainability initiatives,” Diokno said.
In April last year, the BSP issued Circular 1085 or the sustainable financial framework, directing banks to integrate sustainability principles including those covering environmental and social risk areas in the corporate government and risk management frameworks as well as strategic objectives and operations.
This requires banks to establish an environmental and social risk management system and to disclose their sustainability initiatives in their annual reports.
Diokno said the BSP is leading by example through the launch of the Sustainable Central Banking Program two years ago as part of strategic programs for 2020-2023.
“This program aims to foster environmentally responsible and sustainable policies and work practices as well as integrate social governance in its key functions and operations,” Diokno said.
The regulator currently conducts a vulnerability assessment to look into the potential impact of climate change and other environmental risks in BSP offices and branches.
It also collaborates with development partners and interest groups in conducting capacity building activities to help banks better manage environmental and social risks.