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January 26, 2022 - Wednesday
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Davao City, Philippines

BSP: Climate-proof financial system to unlock opportunities

December 06, 2021 - Monday 6:12 PM by GDM

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The Bangko Sentral ng Pilipinas (BSP) on Monday called on banks to support the country's transition to clean energy and support hard-hit MSME and agricultural sectors as part of a broader shift to mainstream sustainable finance.

In a statement, BSP Governor Benjamin E. Diokno said the central bank provides an enabling regulatory environment to drive sustainable finance in the country as banks take on the green and sustainable path and lead supervised entities by example.

"We have started integrating sustainability principles in our investment process with over USD 550 million investment in the Green Bond Fund managed by the Bank for International Settlements," Diokno said.

“We are also reviewing our investment strategy to consider strategic allocation of investments toward those that espouse environmental, social, and governance principles,” he added.

To further enhance the regulatory environment, the BSP said it issued the Sustainable Finance Framework (SFF) and Environmental and Social Risk Management Framework (ESRMF), setting the essential groundwork for succeeding BSP policy issuances in sustainable finance.

Released in April 2020, the SFF highlights overarching principles of integrating sustainability and environmental, social, and governance considerations in banks' corporate and risk governance frameworks, business strategies and operations.

Meanwhile, the ESRMF, which was released in October this year, gives more detailed supervisory expectations on the management of environmental and social risks in the context of credit and operational risks.

"The BSP will remain steadfast in leading sustainability principles in the banking sector consistent with our national aspirations for sustainable development," the BSP boss said.

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