Washington, D.C., February 27, 2017—Emerging
markets have become a major force in driving development and fighting climate
change as 34 countries have initiated banking reforms to expand sustainable
lending, according to the first comprehensive Global Progress Report of
the Sustainable Banking Network, an IFC-supported organization of banking
regulators and associations.
Those 34 countries account for $42.6 trillion in bank assets—more than
85 percent of total bank assets in emerging markets. Some are wealthier
than others, but all of them have made progress in advancing sustainable
finance. Eight countries—Bangladesh, Brazil, China, Colombia, Indonesia,
Mongolia, Nigeria, and Vietnam—have reached an advanced stage, having
implemented large-scale reforms and put in place systems for results measurement.
“This progress is an important step toward achieving the Sustainable Development
Goals by 2030,” said Ethiopis Tafara, IFC’s Vice President for Legal,
Compliance Risk and Sustainability. “It shows that even the poorest countries
can adopt sustainable finance reforms. The Sustainable Banking Network
has demonstrated in a short time how much can be achieved when regulators,
policymakers, trade associations and development institutions collaborate
to advance sustainable finance.”
The report provides practical indicators and tools for countries to apply
to their own domestic markets, regardless of their size or stage of development.
This is important because it facilitates learning by all members and accelerates
the pace of change. It is based on an innovative results-measurement approach
that has been agreed by all 34 member countries—a remarkable achievement
that is breaking new ground for measuring progress at the global level.
Six SBN members are located in Eastern Europe, Central Asia, the Middle
East and North Africa (EMENA) —Egypt, Georgia, Jordan, Morocco, Pakistan,
and Turkey. Morocco and Turkey are considered “emerging” countries
currently implementing sustainable finance policies.
Demonstrating a successful collaboration between government agencies and
public-private sector, the whole financial industry in Morocco has developed
two Roadmaps to develop sustainable finance in both Morocco and Africa.
The proposed measures are broken down for the three major financial sectors
operating in Morocco: banking, insurance and capital markets.
The Turkish banking industry has taken a strong stance on incorporating
environmental and social (E&S) risk management into banking activities
with the publication of the Sustainability Guidelines for the Banking Sector
in 2014. These are some of the most comprehensive guidelines among SBN
members, in terms of risk management.
Pakistan, a new member, released its guidance in October 2017. Egypt, Georgia
and Jordan are relatively new members of SBN beginning to develop their
sustainable finance initiatives.
“The intention of the report is to provide practical information to SBN
member countries to help them develop public policy. It is a useful guide
not only for regulators and the governments, but also for banks, steering
them towards what they could and should do from the bottom up,” said Edi
Setijawan, Sustainable Finance Director, Indonesia Financial Authority
(OJK), and a co-Chair of SBN Measurement Working Group that led the development
of the unique methodology behind the report.
“For the first time, the report provides a concrete picture of what each
country has been doing to develop sustainable finance,” said Ye Yanfei,
Deputy Director-General, China Banking Regulatory Commission and co-Chair
of SBN Measurement Working Group. “The report also identifies areas of
further focus for the member countries to continue to improve.”
Emerging-market countries increasingly are learning from one another as
they adopt sustainable-finance policies, according to the report. Bangladesh,
for example, was one of the first network members to adopt such policies.
Its progress prompted Nepal to undertake regional study tours and peer-learning
exercises in Bangladesh to formulate its own policy.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org
The Sustainable Banking Network (SBN) is a knowledge and capacity-building
platform of financial regulators, banking associations, and environmental
regulators from emerging markets committed to developing sustainable finance
frameworks based on national context and priorities, as well as international
good practices. IFC acts as the Secretariat of the Network, playing the
role of facilitator and technical adviser to SBN. For more information
on the Sustainable Banking Network, visit www.ifc.org/sbn.