The race to ESG mindset in banking and finance

IN the past two years, Bangko Sentral ng Pilipinas (BSP) has issued a series of enabling policies as part of its Sustainable Central Banking Framework. It was a step in the right direction to instill the critical role that financial institutions have in ensuring the sustainability and resilience of the country.

In March 2020, the Sustainable Finance Framework (Circular 1085) emphasized the duty of the Board and Management to institutionalize the adaption of the sustainability principles and create the culture that promotes environmentally and socially responsible business decisions. Circular 1085 was followed by the Environment and Social Risk Management Framework (Circular 1128) which requires banks to adapt comprehensive policies, processes and procedures to manage operational risk arising from environmental and social risks. In August 2022, the Guidelines on the Integration of Sustainability Principles in Investment Activities of Banks was issued.