Ulaanbaatar, Mongolia, Dec 16, 2014 – The Mongolian Bankers Association
(MBA), the Ministry of Environment, Green Development and Tourism, the
Bank of Mongolia, IFC (a member of the World Bank Group), and Dutch Development
Bank FMO today launched the Mongolian Sustainable Finance Principles and
Sector Guidelines, a voluntary framework to help local banks integrate
environmental and social considerations into lending decisions and product
design, promoting sustainable development in the resource-rich country.
The new guidelines, which will take effect
in January, were introduced to the public at the Mongolia Sustainable Finance
Forum 2014 today. The guidelines cover four key industries: mining, agriculture,
construction, and manufacturing. By implementing these practices, banks
will reduce the risk of loan defaults and identify new business opportunities,
such as in renewable energy and clean technologies.
“Sustainable finance presents a new
economic model, one in which growth no longer comes at the expenses of
communities and the environment, but instead contributes to a thriving
green economy,” said Oyunkhorol Dulamsuren, Minister of Environment,
Green Development and Tourism. “We are keen to support initiatives
like this to promote long-term and inclusive growth in Mongolia.”
The newly launched principles are based
on international benchmarks, particularly the IFC Performance Standards,
the World Bank Group Environmental, Health, and Safety Guidelines, and
the Equator Principles, a private sector-led credit risk management framework
for determining, assessing, and managing environmental and social risk
in project-finance transactions.
As one of the fastest growing economies
in the world, Mongolia relies on industries – mining, livestock, and real
estate development – that can contribute to pollution or water scarcity,
making banking practices that take environmental and social considerations
into account all the more necessary.
“Sustainable banking practices protects
bank assets and create business opportunities by opening new markets and
products,” said Naidalaa Badrakh, CEO of MBA. “To help banks adopt
such practices, we are keen to promote knowledge sharing and productive
dialogue among stakeholders, building sector capacity and a level-playing
In 2013, several CEOs of major Mongolian
banks gathered at the first Mongolia Sustainable Finance Forum and agreed
to create a working group, convened by MBA and supported by regulators,
to develop a framework to address Mongolia’s environmental and social
issues through lending.
“The positive link between environmental
and social standards and improved commercial performance is firmly established
and has opened up new lending and investment opportunities in many countries”,
said Vivek Pathak, IFC’s Director for Asia and the Pacific. “We
are committed to facilitating the implementation of Mongolia’s sustainable
finance agenda with our global expertise and local knowledge.”
IFC plans to launch a Training of Trainers
program next year to build industry capacity and improve Mongolian banks’
performance in environmental and social risk management.
“Mongolia’s sustainable finance journey
is clearly an inspiration, one that has been defined by strong local ownership,
joint commitment and strategic partnership. The banking sector has demonstrated
within a short timeframe that it is possible to chart a common course for
a green economy”, said Jaap Reinking, FMO’s Director for Financial
Institutions. “As we applaud today’s achievement, we recognize that
the implementation of the Principles will demand the same degree of collective
will we have witnessed till date. FMO will continue to support on-going
efforts of the industry in promoting sustainable finance practices.
An increasing number of emerging markets
are adopting sustainable banking practices, including China, Bangladesh,
Brazil, Nigeria and Indonesia, in a combination of regulatory guidance
and industry-led voluntary initiatives similar to that of Mongolia.
The Sustainable Banking Network was launched
in 2012 with Mongolia as a founding member and today includes 14 countries.
Through this IFC-facilitated network, regulators and banking associations
can share knowledge and resources to develop environmental and social best
practices in their countries’ financial markets.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. Working with private
enterprises in about 100 countries, we use our capital, expertise, and
influence to help eliminate extreme poverty and boost shared prosperity.
In FY14, we provided more than $22 billion in financing to improve lives
in developing countries and tackle the most urgent challenges of development.
For more information, visit www.ifc.org.
FMO supports sustainable private sector growth in developing and emerging
markets by investing in ambitious entrepreneurs. FMO believes a strong
private sector leads to economic and social development, empowering people
to employ their skills and improve their quality of life. FMO focuses on
three sectors that have high development impact: financial institutions,
energy, and agribusiness, food & water. With an investment portfolio
of EUR 6.3 billion, FMO is one of the largest European bilateral private
sector development banks. For more information, visit http://www.fmo.nl/
The Mongolian Bankers Association is an independent, non-profit, non-government
organization established in 2000 by the banking and non-banking financial
institutions in Mongolia. As of today, we are the voice for 22 member financial
institutions including 13 commercial banks, the Development Bank of Mongolia,
3 foreign Bank Representative Offices and non-bank financial institutions.The
Vision of the MBA is to become a powerful professional organization representing
the bankers and financial officers, to lead the banking and financial sector
to ensure the sustainable development and equitable economic growth of
Mongolia, and to contribute substantially to the development of the country
as the regional financial center. For more information, visit http://mba.mn/
About Ministry of Environment, Green
Development and Tourism
The Mission of the MEGDT is “To ensure human rights live in healthy and
sound environment by promoting social and economic development taking into
consideration of ecological balance, promoting the sustainable use of natural
resources, and facilitating the natural rehabilitation and restoration
of environmental degradation to support green development, and to develop
cooperation and participation of the Government, citizens, private entities
and organizations on supporting sustainable development.”
For more information, visit http://www.mne.mn/
About Bank of Mongolia
As the Central Bank, the Bank of Mongolia (BoM) ensures the stability of
the national currency – Togrog. Within this main objective, the BoM promotes
balanced and sustained development of the national economy, through maintaining
the stability of money, financial markets, and the banking system. In order
to implement its objectives, the BoM conducts activities such as issuing
currencies in circulation, formulation and implementation of monetary policy,
acting as the Government’s fiscal intermediary, supervision of banking
activities, organization of inter-bank payments and settlements, management
of the official foreign exchange reserves.
For more information, visit http://www.mongolbank.mn/eng/default.aspx