Bangko Sentral ng Pilipinas Governor Benjamin Diokno on Monday asked banks to support the country’s transition to renewable energy and back small businesses and agricultural sectors hit hard by the pandemic as part of a broader shift to mainstream sustainable finance.
Diokno said during the recent Maybank 25th anniversary forum that the BSP provides an enabling regulatory environment to drive sustainable finance in the country as banks take on the green and sustainable path and lead supervised entities by example.
“We have started integrating sustainability principles in our investment process with over $550 million investment in the Green Bond Fund managed by the Bank for International Settlements,” Diokno said in a presentation.
“We are also reviewing our investment strategy to consider strategic allocation of investments toward those that espouse environmental, social, and governance principles,” he said.
He said to further enhance the regulatory environment, the BSP issued the Sustainable Finance Framework and Environmental and Social Risk Management Framework, setting the groundwork for succeeding BSP policy issuances in sustainable finance.
Released in April 2020, the Sustainable Finance Framework highlights overarching principles of integrating sustainability and environmental, social and governance considerations in banks’ corporate and risk governance frameworks, business strategies and operations.
Meanwhile, the Environmental and Social Risk Management Framework, which was released in October this year, gives more detailed supervisory expectations on the management of environmental and social risks in the context of credit and operational risks.
“The BSP will remain steadfast in leading sustainability principles in the banking sector consistent with our national aspirations for sustainable development,” Diokno said.