IFC to develop ESRM guidelines for BoG and banking industry

The Bank of Ghana is to conclude discussions on a Cooperation Agreement with the International Financial Corporation (IFC) for the development of Environmental and Social Risk Management (ESRM) guidelines for both the BoG and the banking industry.

Under the agreement, IFC will provide technical support for the organizational strengthening at Bank of Ghana and support the implementation of ESRM guidelines and the development of monitoring procedures for BoG to supervise their implementation.

Speaking at BoG’s “Sustainable Banking Principles Stakeholder Forum” held in Accra yesterday, Mrs Elsie Addo Awadzi, Deputy Governor of BoG said the IFC would also assist in the identification of sustainable lending opportunities and practices in Ghana, and support knowledge management communication and outreach activities in relation to ESRM.

She said BoG was committed to leading the industry to achieve the objectives of the sustainable Banking Principles.

“We expect that this will also encourage banks to incorporate ESRM within their business activities and operational procedures. We are hopeful that these principles once finalized and launched will be implemented and not stay on shelves,” she added.

Mrs Awudzi said in recognition of the need for sustainable banking, BoG in collaboration with the Ghana Association of Bankers and the Environmental Protection Agency in 2015 set out to bring to the fore, issues that were affecting the protection and sustenance of the environment, and also combating the social issues that affect the livelihoods and lifestyles of the vulnerable members of society.

She noted that their collaborative effort has resulted in the preparation of Sustainable Banking Principles and Sector Guidelines Notes to be used by Ghana’s banking sector.

The principles include, promoting good environmental and social governance practices in banks’ internal business operation, promoting good corporate governance and ethical standards, promoting gender equality and promoting financial inclusion.

Mrs Awuszi thanked the IFC and the Swiss Secretariat for Economic Affairs for their support during the process.

“They have provided opportunities for capacity building for members of the Steering Committee in addition to financial support and hosting of this stakeholders forum,” she added.

She used the opportunity to invite other development financial institutions to support the banking industry throughout the period of implementation of the principles.

Mr Musa Salah, Chairman, Ghana Sustainable Banking Principle Committee said the committee would appreciate the input of stakeholders towards reorienting the balance in social inclusion and environmental consideration, as well as sharpening the content of the document for effective implementation while promoting transparency in corporate reporting of sustainable banking practices to enhance disclosure among others.

He assured that the committee would work with them and duly consider their inputs in the draft document.

For his part, Mr Daniel Mensah, Chief Executive Officer of Ghana Association of Bankers said they as an association have been very committed to sustainable development and have worked hard in that regard.