THE Bangko Sentral ng Pilipinas (BSP) affirmed its commitment to pushing for sustainable finance and environmental, social and corporate governance (ESG) principles into the local financial system.
Virtually speaking in an international arena, BSP Governor Benjamin E. Diokno said the country has already established a “Sustainable Central Banking” roadmap for sustainability in the Philippines.
“[The roadmap will] provide the framework and milestones in the adoption of sustainability principles in key operations of the BSP,” Diokno said in a recent virtual dialogue with International Monetary Fund officials and other Asian finance ministers.
In this roadmap, the governor said the BSP adopts three roles—as enabler, mobilizer, and doer—in advocating sustainability in the financial system.
“As an enabler, BSP issued the ‘sustainable finance framework,’ which emphasizes the pivotal roles of the board of directors and senior management in embedding ESG principles in all aspects of banks’ governance, risk management systems, business strategies and operations,” Diokno said.
“As a mobilizer, the BSP leads financial institutions in carrying out environmentally and socially responsible business decisions and adopting green practices, including adopting green principles in their investment portfolios,” the governor added.
In October 2019, the BSP announced its decision to invest in green bonds launched by the Bank for International Settlements (BIS).
“As a doer, the BSP adopted best practices for environmental preservation, greenhouse gas emissions reduction, and embedding ESG sustainability criteria in its own operations,” Diokno said.
According to earlier data from Diokno, more than $1 billion and P85.4-billion worth of green, social and sustainability bonds have already been issued by “first mover” banks since 2017.
“The BSP and financial institutions play a crucial part in mobilizing funds to finance green and sustainable projects, and at the same time, in safeguarding financial stability from shocks coming from climate and other environment-related factors,” the governor earlier said. “We expect more banks to follow suit as enabling regulations had been laid down complemented by continued capacity-building activities for the industry.”