BSP affirms commitment to sustainable finance

The Bangko Sentral ng Pilipinas (BSP) affirmed its commitment to champion sustainable finance and entrench environmental, social, and corporate governance (ESG) principles into the Philippine financial system.

In a recent virtual dialogue with the International Monetary Fund and other Asian finance ministers, BSP Governor Benjamin E. Diokno said the central bank established a Sustainable Central Banking Roadmap to “provide the framework and milestones in the adoption of sustainability principles in key operations of the BSP.”

He added that the framework highlights the BSP’s essential roles as enabler, mobilizer, and doer in advocating sustainability in the financial system.

As enabler, BSP issued the Sustainable Finance Framework which emphasizes the pivotal roles of the board of directors and senior management in embedding ESG principles in all aspects of banks’ governance, risk management systems, business strategies and operations.

As a mobilizer, the BSP leads financial institutions in carrying out environmentally and socially responsible business decisions and adopting green practices, including adopting green principles in their investment portfolios. Leading by example, the BSP has invested in the Green Bond Fund of the Bank for International Settlements as part of its sustainable investment strategy.

Meanwhile, as a doer, the BSP adopted best practices for environmental preservation, greenhouse gas emissions reduction, and embedding ESG sustainability criteria in its own operations. Further, it created bank-wide technical working groups to conduct vulnerability assessment on the impact of climate change to the BSP and identify the areas of operation where ESG or green principles may be incorporated.

“Understanding the ESG and climate risks will help banks to effectively manage such risks and to unlock the opportunities contributing to the scaling up of green or sustainable finance,” the Governor said.