Published by the Visayan Daily Star
Editor-in-Chief & President
Bureau Chief, Dumaguete
MAJA P. DELY
|CARLOS ANTONIO L. LEONARDIA
The Bangko Sentral ng Pilipinas is ramping up the promotion of sustainable financing via enabling regulations as well as capacity building and awareness campaigns. According to BSP Governor Benjamin Diokno, the central bank is currently in the process of consolidating and evaluating comments from industry players on the proposed policy framework for sustainable finance.
Under the proposed regulatory framework, Diokno said banks are expected to integrate environmental and social governance and sustainability principles in their strategic direction, as well as in their corporate governance and risk management frameworks. He added that banks will also be required to conduct scenario analysis and stress testing of its business exposures to assess their vulnerabilities over several environmental and social governance scenarios.
Sustainable finance refers to any form of financial service integrating environmental, social and governance criteria into the business or investment decisions for the lasting benefit of both clients and society at large. It aims to ensure and improve economic efficiency, prosperity and economic competitiveness for both today and in the long term, while contributing to protecting and restoring ecological systems, and enhancing cultural diversity and social well-being.
The BSP governor added that they continue to take park in several domestic and international fora on sustainability such as the ASEAN Task Force on the roles of central banks in addressing climate and environment-related risks. Additionally, they are co-chair of a newly formed inter-agency task force mandated to facilitate green finance initiatives.
Banks and financial institutions are often regarded as cold and calculating, only concerned with investments and financial returns. But with the lead of a central bank that can use its policymaking powers to nudge them towards the direction of greener and more sustainable finance that can make progress, developmentand prosperity not only more inclusive, but beneficial for our planet as well.*