The central bank of the Philippines affirmed its commitment to champion sustainable finance and entrench environmental, social, and corporate governance principles into the Philippine financial system, telling international stakeholders that it now has regulations meant to get banks to adopt the program.
At a recent online dialogue with the International Monetary Fund and other Asian finance ministers, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the agency 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 enforcer in advocating sustainability in the financial system.
The BSP issued the Sustainable Finance Framework, which emphasizes the pivotal roles of the board of directors and senior management in embedding environmental, social, and corporate governance principles in all aspects of banks’ governance, risk management systems, business strategies and operations.
The BSP also leads financial institutions in carrying out environmentally and socially responsible business decisions and adopting green practices, including adopting green principles in their investment portfolios.
In particular, the BSP has invested in the Green Bond Fund of the Bank for International Settlements as part of its sustainable investment strategy.
Finally, the BSP adopted best practices for environmental preservation, greenhouse gas emissions reduction, and embedding environmental, social, and corporate governance sustainability criteria in its own operations.
It created bank-wide technical working groups to conduct a vulnerability assessment on the impact of climate change to the BSP and identify the areas of operation where green principles may be incorporated.
“Understanding the [environmental, social, and corporate governance principles] 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,” Diokno said.
Also present during the digital forum were IMF Deputy Managing Director Antoinette Sayeh, Indonesian Minister of Finance Sri Mulyani Indrawati, Thai Minister of Finance Arkhom Termpittayapaisith and Monetary Authority of Singapore Managing Director Ravi Menon.