SINGAPORE: The WWF has released a guide for banks to go beyond reputation and risk management to embrace "transformative change and sustainable practices".
The move follows this month's record US$16.6 billion settlement by the Bank of America with the U.S. Department of Justice (DoJ) following claims it misled investors of its mortgage-backed securities prior to the 2008 financial crash.
The WWF maps out how financial institutions can manage their risk exposure to unsustainable business practices and lead the trend toward green business says Jeanne Stampe, WWF Asia Finance and Commodities Specialist.
Stampe says banks can no longer ignore credit risks resulting from severe weather impacting infrastructure or agricultural production; or water stress affecting production across sectors or regulations that affect the value of carbon assets or carbon-related infrastructure.
The new guide provides financial institutions with a toolkit to develop an environmental, social and governance (ESG) strategy and an operational framework to integrate ESG issues into their practices.
Ben Ridley, Asia Pacific Head of Sustainability Affairs at Credit Suisse commented: "Credit Suisse is proud to sponsor this guide. It provides Asian banks with the background, knowledge and tools to develop a strategy and action plan to embed consideration of key ESG issues into their core business."
"The call to address environmental concerns has grown increasingly louder over time. Businesses, whether upstream or downstream, need to work together to do what is right and banks can play a significant role in promoting sustainability. While change will not happen overnight, the WWF guide can serve as a roadmap to provide insights on how ESG issues can be integrated into business processes to achieve this purpose," said Samuel Tsien, chairman of The Association of Banks in Singapore.
According to The Economist magazine, this year Bank of America, JPMorgan Chase, Citigroup, Goldman Sachs and other banks have paid "close to US$50 billion for supposedly misleading investors in mortgage-backed bonds. BNP Paribas is paying US$9 billion over breaches of American sanctions against Sudan and Iran. Credit Suisse, UBS, Barclays and others have settled for billions more, over various accusations".