A financial group has called for the adoption of impact-reporting standards that account for social and environmental factors to speed up a sustainable transition for banks.
The consortium – named Banking for Impact – is an alliance between Dutch bank ABN AMRO, Danske Bank, DBS Bank, UBS Group, Harvard Business School’s Impact Weighted Accounts Initiative (IWAI) and the Impact Institute.
According to Banking for Impact, financial firms need new reporting rules that pull positive and negative issues such as job creation and pollution into standard practices to create a well-rounded idea of how they create true value.
The group claims it aims to create new reporting standards for financial firms known as impact measurement and valuation (IMV), which it believes can help fuel sustainable economic decisions.
Banking for Impact recently published a paper that outlined plans to build an ‘IMV Approach’ that includes the quantification, attribution, valuation and aggregation of impacts for the financial sector – standards it highlights do not yet currently exist for financial firms.
IWAI chairman Sir Ronald Cohen said, “The sooner banks embrace impact measurement, the sooner they can meet rising expectations for responsible behaviour. Impact transparency will focus banks on providing solutions for people and planet, rather than financing the creation or aggravation of problems. This will redefine banking success to include both profit and impact performance, improving lives and the planet.”
Impact Institute executive director Adrian de Groot Ruiz added, “Banks can help build the economy of the 21st century by becoming stewards of natural, intellectual, social and human capital as they already do financial capital.
“They play a pivotal role in building the impact economy, where work, entrepreneurship, innovation, and technology are dedicated to creating a positive impact on the world. Banking For Impact will gain traction because the most reliable long-term profit driver has always been the actual value banks create for society.”
A recent survey found 70% of respondents believe organisations have a responsibility to demonstrate environmental, social and governance performance to investors.
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