Environmental Social and Governance Integration for Banks | WWF Malaysia

Environmental Social and Governance Integration for Banks



Posted on 05 November 2014
Environmental, Social & Governance Intergration for Banks
© WWF-Malaysia
According to the 2012 WWF Living Planet Report, humanity’s ecological footprint will exceed the Earth’s regenerative capacity by 100% in 2030 under a business-as-usual scenario. Climate change and the depletion of natural capital owing to human factors will pose risks and opportunities for banks. For example, credit risks could result from more severe weather patterns affecting infrastructure or agricultural production, water stress could affect production across numerous sectors, and regulations could reduce the value of carbon assets or carbon-related infrastructure.

On the flip side, the transition to a carbon-constrained and more urbanised economy creates financing needs in renewable energy, energy efficiency and sustainable transportation infrastructure. Banks are increasingly aware that business-as-usual is no longer acceptable and that they have to integrate Environmental, Social and Governance (ESG) factors into their core business to better manage these risks and capitalise on opportunities in the transition to a more sustainable global economy.

Therefore, on 28 October 2014, WWF-Malaysia organised an ESG workshop, “ESG Integration for Banks”, with Bursa Malaysia as our venue partner. This workshop aimed to enhance banks’ understanding on why ESG integration is core to their long term business viability, and should therefore be a part of overall business and corporate strategy to necessarily build shareholder value, competitive strategic advantage, international growth, regulatory compliance and long term business profitability/viability.

The workshop was facilitated by Mr Robert Tacon, a former Chairman and Advisor of UNEP FI and guided by the ESG Integration for Banks: A Guide to Starting Implementation. The guide provided practical examples and helped guide banks with relevant materials to embark on internal ESG journeys according to their ambition and appetite. The workshop also shared some of the real life examples by ESG practicing banks and corporations, on why ESG should be mainstreamed in a collective manner in the present business climate. These are the relevant documents shared and distributed at the workshop:
  1. The ESG Integration for Banks: A Guide to Starting Implementation
  2. Palm Oil Investor Review: Investor Guidance on Palm Oil
  3. The 2050 Criteria Guide to Responsible Investment in Agricultural, Forest, and Seafood Commodities