The majority of banks financing policies do not uphold environmental and social standards developed by UN bodies and other international bodies. This is a key finding of Sustainable Finance: Moving the Banking Sector from Promises to Performance, a report launched at Davos by campaign groups WWF and BankTrack, a global coalition of fourteen non-governmental organisations. The study ranked the financing policies of 39 banks across thirteen areas, from climate change to human rights.
Of the 39 banks surveyed, the report only found two cases in which bank policy on a specific issue met all or most of the relevant international standards or best practices – Rabobank’s adoption of the UN Draft norms on Human Rights and HSBC’s adoption of the World Commission on Dams standards. Only eight banks have a human rights policy. According to Jules Peck, WWF’s global policy officer, banks in the report generally had “vaguely worded policies, which include limited commitments, and fail to meet international standards”.
Robert Napier, WWF’s chief executive, said: “The lack of transparent policies can not only result in over-exploitation of environmental goods such as fisheries and forests but also in increased financial risk to the banks, resulting in transactions being jeopardised”. The campaign group is calling for the banking sector to adopt more transparent financing policies, both to advance sustainability and to help reduce their exposure to risk. Contact Anthony Field, WWF-UK 01483 412 379 www.wwf.org.uk
Briefing comment
Full marks to WWF for a well-researched study, proving that not all NGOs indulge in hatchet jobs. But three quibbles nonetheless. First, the problem of using a league table approach is that leaders like ABN-AMRO and HSBC may think they are off the hook. In fact, although they score better than competitors, they are still a long way short of the WWF’s ideal. Second, WWF has cast the goal largely in terms of not doing bad things, like funding damaging dams. Better if WWF had included a score on banks’ effectiveness in moving surplus capital from one part of the world, as cost-effectively as possible, to others where it can be used more productively to create jobs and lift communities out of poverty. Third, WWF is claiming that good progress by some banks is due “to a large degree” to outside pressure. That underplays the importance of banks’ own values and the power of the business case for action. NGOs certainly have speeded up the process of addressing the issues. But they would be ill-advised to base the case for action on a solely moral or reputation case. That is unsustainable.
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