Climate Action

Launch of new standards for financing sustainable development

On Monday 30 January 2017, 19 leading global banks and investors – worth a total of $6.6 trillion in assets, launched the Principles for Positive Impact Finance, setting standards for financing sustainable development

  • 31 January 2017
  • Websolutions

On Monday 30 January 2017, 19 leading global banks and investors – worth a total of $6.6 trillion in assets, launched the Principles for Positive Impact Finance, setting standards for financing sustainable development. 

The four Positive Impact Principles – which are the first of their kind – provide a global framework for financiers and investors to analyse, monitor and disclose the social, environmental and economic impacts of the financial products and services they supply.

The Principles were developed by the Positive Impact Working Group, a group of United Nations Environment Finance Initiative (UNEP FI) banking and investment members.

At present, the Positive Impact Working Group includes:

  • Australian Ethical
  • Banco Itaú
  • BNP Paribas
  • BMCE Bank of Africa
  • Caisse des Dépôts Group
  • Desjardins Group
  • First Rand
  • Hermes Investment Management
  • ING
  • Mirov
  • NedBank
  • Pax World
  • Piraeus Bank
  • SEB
  • Société Générale
  • Standard Bank
  • Triodos Bank
  • Westpac
  • YES Bank

According to the UN, the framework can be applied across multiple business lines, including retail, corporate and investment lending and asset management.

The Principles do not advocate a single method for achieving positive impact, but require transparency during evaluation processes and methodologies.

High-level representatives from the financial sector and French Minister for the Economy and Finance, M. Michel Sapin, attended the launch.

Sapin said: "The Principles are a timely initiative from the finance sector. They demonstrate the willingness of financial institutions to go beyond current practices and to contribute to foster a more sustainable development…They should provide strengthened foundations for a positive cooperation between public and private actors in this area."

According to the UN statement, the Principles require “a holistic appraisal of positive and negative impacts on economic development, human well-being and the environment.”

Eric Usher, Head of UNEP FI, said: "Achieving the Sustainable Development Goals - the global action plan to end poverty, combat climate change and protect the environment - is expected to cost $5 to 7 trillion every year through 2030."

He went on to say: “The Positive Impact Principles are a game changer, which will help to channel the hundreds of trillions of dollars managed by banks and investors towards clean, low‑carbon and inclusive projects.”

The Principles are part of a wider process under the Positive Impact Manifesto, launched in 2015 calling for a new impact-based financing paradigm to “bridge the gap in financing for sustainable development.”

Gérard Mestrallet, Chairman of Paris EUROPLACE and Chairman of the Board of ENGIE, said: "The Principles are the tool that is needed to enable the business and finance community to work and innovate together, and to address the challenge of the UN Sustainable Development Goals. The financial sector has already moved forward in that direction and we hope that the Principles as well as the Paris Green and Sustainable Finance Initiative we launched last year will help marking a new stage.”

The 2nd annual Sustainable Investment Forum will unite more than 350 policy makers and representatives of the private and public sector to discuss how to scale-up climate finance to achieve the aims of the Paris Agreement, on 19 September 2017 in New York. More information here

Image source: Neil Palmer (CIAT). Tea pickers in Kenya's Mount Kenya region, for the Two Degrees Up project, to look at the impact of climate change on agriculture.