No More Greenwashing: Principles Must Have Consequences

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Inclusive Development International joins 21 civil society organizations in calling on signatories to the new Principles for Responsible Banking (PRB) to commit to immediately end all financing for fossil fuel expansion and activities driving deforestation and human rights abuses.

Inclusive Development International joins 21 civil society organizations in calling on signatories to the new Principles for Responsible Banking (PRB) to commit to immediately end all financing for fossil fuel expansion and activities driving deforestation and human rights abuses. The joint statement calls for a 1.5°C compatible phase-out of financing for the fossil fuel industry and forest-risk commodity sectors, based on a comprehensive assessment of their financing impacts and full transparency of the companies and projects being financed.  It also emphasizes the urgent need for PRB banks to fulfill all requirements of the UN Guiding Principles on Business and Human Rights (UNGPs), including by establishing or participating in UNGP-compatible grievance mechanisms.

The launch of the Principles for Responsible Banking (PRB), a bank-led initiative supported by the UN Environment Programme Finance Initiative (UNEP FI), is a welcome acknowledgement that the activities of the banking sector can have harmful social and environmental impacts, and that industry has a responsibility to prevent and address those impacts. But the new Principles are not sufficient to prevent harm or hold banks to account.

One hundred thirty participating banks have so far embraced the PRB, making a much-needed public commitment to align their financing with the Sustainable Development Goals (SDGs) and the Paris Climate Agreement. But at a time when our planet is teetering on the brink of climate catastrophe, the up to four years that the PRB gives participating banks to demonstrate they are implementing the principles is far too long, and even the earliest banks to endorse the PRB have dragged their feet on publishing concrete implementation plans. Meanwhile some PRB signatories continue to fund industries driving climate change and deforestation, including the fossil fuel industry, and continue to finance projects linked to human rights violations. The latter also represents a major flaw in the PRB, which does not commit participating banks to the UNGPs or otherwise make the human rights responsibilities of banks explicit.  The joint statement provides details of the investment behaviors of eight banks with “significant gaps between their PRB commitments and their unsustainable financing practices,” and urges all PRB signatories to act quickly to end their harmful financing.

Read the full statement here.

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