Lima, Peru, September 16, 2015---IFC,
the private sector arm of the World Bank Group, and Peru’s Superintendency
of Banking, Insurance and Private Pension Fund Administrators (SBS) highlighted
today in an international conference the crucial role the financial sector
must play as an engine of green and inclusive growth.
SBS and IFC launched in Lima the International Sustainable Finance Forum
with the participation of banking regulators, experts and representatives
of the private sector from more than 25 countries. Hosting 150 delegates,
the conference represents the largest-ever gathering of banking regulators
focused on sustainable finance, the latest indication of the critical nature
of this issue for the financial sector. The meeting is coordinated by the
Sustainable Banking Network, a platform of regulators and banking associations
that has been instrumental in prompting regulators to guide their respective
financial sectors towards sustainable finance and the green economy.
In recent years, sustainable finance has made great strides, partly driven
by SBN, with the number of member-countries that have incorporated national
frameworks to promote it doubling to 10 in the last year alone. Regulators
are recognizing the value of guiding banks to understand and manage environmental
and social impacts, while realizing the numerous opportunities to lend
and invest in green and inclusive sectors.
“Sustainable finance has made great progress and we are excited to see
new trends that show that sustainable finance is becoming the norm in emerging
economies, which are adapting international best-practices for their local
markets,” said Morgan Landy, Director of Environment, Social and Governance
at IFC. “Sustainable finance practices are now not only being used by
banks, but by the wider financial system with all of types of financial
institutions looking at these guidelines,” he said.
A recent example is Peru, where the local regulator has launched a new
framework to guide the implementation of social and environmental risk
evaluation by the financial sector and encourage the use of international
best practices by local banks in these areas.
SBN, an initiative launched with IFC’s support, has led this effort by
promoting an exchange of ideas and best practices between its members,
which have jumped to 19 countries since its inception in 2012. IFC has
also backed regulators in these efforts by providing its technical expertise
and Performance Standards, which have been implemented by more than 80
financial institutions worldwide. The conference also showcased how the
success of the last few years has created a spillover effect to include
capital markets, pension funds and insurance firms, among others.
According to SBS, the objective of this new regulation is to align different
the tools for managing environmental and social risk that are used by banks
during the structuring and approval of financing for projects that may
have social or environmental impacts.
Sustainable finance is essential for banks to have a solid understanding
of the environmental and social impact of their activities. It provides
banks with the tools to manage these risks in their day-to-day business
activities, policies and procedures. This also allows banks to find new
business opportunities and confront some of the social and environmental
challenges in the countries where they operate.
The result is that banks that successfully incorporate these frameworks
add long-term value for their clients and stakeholders while also supporting
the sustainable growth of the economies where they operate.
The number of countries that have regulatory frameworks to promote sustainable
finance has increased sharply during the last few years. In Latin America,
Colombia, Peru and Brazil have developed regulations and protocols to encourage
the implementation of sustainable finance mechanisms in their local markets.
SBN has been supported by the government’s Japan, Denmark, Germany’s
Federal Ministry for Economic Cooperation and Development (BMZ) and Switzerland’s
State Secretariat for Economic Affairs (SECO).
The event is part of the “Road to Lima” initiative which includes a series
of high-profile events organized by the Government of Peru, the World Bank
Group, and the International Monetary Fund leading up to the 2015 Annual
Meetings of the World Bank Group and the International Monetary Fund taking
place in Peru in October 2015.
IFC has invested a total of US$3.1 billion in Peru since 1956, when Peru
became a member country, including US$1.1 billion in funding mobilized.
IFC’s strategy in Peru aims to increase debt and equity financing, improve
the investment climate and support key players in Peru’s private sector
that can expand the country’s infrastructure as well as deliver products
and services to underserved sectors, for example by expanding access to
finance for micro, small, and medium enterprises (MSMEs), as well as access
to housing, health and education finance.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in emerging markets. Working
with more than 2,000 businesses worldwide, we use our capital, expertise,
and influence, to create opportunity where it’s needed most. In FY15,
our long-term investments in developing countries rose to nearly $18 billion,
helping the private sector play an essential role in the global effort
to end extreme poverty and boost shared prosperity. For more information,