Maximising the Benefits
What are the benefits of becoming a UN PRB signatory?
Becoming a signatory of the United Nations Principles for Responsible Banking (PRB) can provide several benefits to a financial institution.
Enhancing reputation and stakeholder trust
Signing onto the UN PRB demonstrates an institution's commitment to responsible banking practices and sustainable finance, which can improve its reputation among customers, investors, and other stakeholders.
Accessing new business opportunities
As more investors and customers prioritise sustainable and responsible practices, being a signatory of the UN PRB can open up new business opportunities and partnerships.
Improving risk management
By implementing the principles of responsible banking, financial institutions can better manage their environmental, social, and governance (ESG) risks, which can lead to better risk-adjusted returns.
Meeting regulatory requirements
As regulators increasingly focus on ESG issues, being a signatory of the UN PRB can help financial institutions meet regulatory requirements and expectations.
Driving innovation
Implementing responsible banking practices can lead to new products and services, as well as more efficient operations, which can drive innovation and create competitive advantages.
Collaborating with peers
Being a signatory of the UN PRB provides opportunities for financial institutions to collaborate with other banks and stakeholders to address shared sustainability challenges, learn from each other, and drive collective action towards a more sustainable future.
Overcoming the barriers
What are the barriers to becoming a signatory of the UN PRB?
There are potential barriers that a financial institution may face in becoming a signatory of the UNPRB. However, these can be scaled with the correct guidance, resource and support.
Resource constraints
Implementing the principles of responsible banking can require significant resources, including financial, human, and technological resources. Smaller institutions or those with limited resources may find it challenging to allocate the necessary resources to become a signatory.
Lack of buy-in from senior management
Implementing responsible banking practices requires buy-in and commitment from senior management. If senior leaders do not support the initiative, it may be challenging to make progress towards becoming a signatory.
Regulatory barriers
In some cases, regulatory frameworks or policies may be a barrier to implementing responsible banking practices or becoming a signatory of the UN PRB. Institutions operating in regions with weaker or less supportive regulatory frameworks may find it more challenging to implement the principles of responsible banking.
Limited knowledge or expertise
Implementing responsible banking practices requires a deep understanding of sustainability issues, as well as knowledge of best practices and emerging trends. Institutions that lack this knowledge or expertise may struggle to implement the principles of responsible banking effectively.
Cultural barriers
Implementing responsible banking practices can require a significant shift in organizational culture and values. Institutions that have a deeply ingrained culture or resistance to change may struggle to make the necessary cultural shifts to become a signatory.
While there are many potential benefits to becoming a signatory of the UN PRB, there are obligations and challenges that financial institutions will face while implementing the tenets of responsible banking practices. These are challenges that will need to be addressed and overcome for institutions to successfully become signatories and implement sustainable and responsible banking practices.
We can help.
The Global Ethical Finance Initiative can support your implementation »
"GEFI was a tremendous support to us throughout the process. Clear in their advice, careful in their implementation and engaged in the promotion of the move. We were always keen to become a signatory to the UN PRB; GEFI helped us get there quicker and more effectively than had we done so alone."
~ CEO of a large retail bank based in Pakistan
Support
How can the Global Ethical Finance Initiative help your institution navigate the process to becoming a UN PRB signatory?
The Principles for Responsible Banking (“PRB”) is a unique framework that ensures a signatory banks’ strategy and practice are aligned with the vision society has set out for its future in the Sustainable Development Goals (“SDGs”) and the Paris Climate Agreement. Becoming a PRB signatory guides a bank in aligning its focus with its country’s needs and goals and demonstrates to the world that the bank is focussed on making a positive social impact, promoting welfare and sustainability. The PRB help banks to develop an approach that prioritises purpose, people and planet. The potential benefits of becoming a PRB signatory may include an improved credit rating, a reduced risk profile, lower funding costs and incremental earnings from new business opportunities. A signatory bank is demonstrating its alignment with international best practices and its commitment to integrate social and environmental considerations into its operational processes.
There are a number of requirements for PRB signatory banks and adhering to these requires resource and cost (the direct annual PRB fees alone vary between cUSD$4k-$35k depending on the size of the bank’s balance sheet). To become a PRB signatory the bank must sign the PRB, become a UNEP Finance Initiative member and announce that the bank has joined the PRB. A signatory bank is required to analyse its impact, set and implement targets and publicly report on its progress. After 18 months the signatory bank must publicly report on this and within four years, signatory banks must have met all of the PRB requirements. Signatory banks are required to report annually and will be held accountable to their commitments through an annual review of individual progress.
Pre-announcement - set up and orientation
Prior to becoming signatories, it is important for a bank to understand the PRB requirements and start the journey considering the implementation of operational processes necessary to ensure compliance with the PRB. Services through this phase include internal technical and strategic briefing, operating framework, SDGs identification, training and publicity.
Announcement – maximising international publicity
The announcement of the bank becoming a PRB signatory will be a significant occasion. Announcements send a strong global message that the bank is progressive, committed to sustainability and taking practical action to combat climate change as well as looking beyond climate to major issues such as poverty, inequality, and gender. This can be particularly important in demonstrating differentiation and leadership for Islamic banks.
Post-Announcement - preparedness and build-out
The PRB provide 18 months for signatory banks to report on their impact, how they are implementing the Principles, the targets they have set and the progress they have made. Within four years signatory banks must have met all of these requirements. We can assist in this process by offering further advisory services around impact analysis, target setting & implementation and reporting.
Contact
We can help.
GEFI is a sister entity to the UKIFC and a leading mainstream / conventional finance body focused on ESG / sustainability and has the knowledge and expertise to guide banks on their journey to sign up to the PRB. UKIFC and GEFI have assisted UK banks in signing up to the PRB (including Islamic banks) and has a strong direct relationship with the UN PRB team.
The three areas of proposed assistance noted above are designed to assist internal policy setting and detailing the operational framework adjustments that will enable banks to successfully navigate becoming a PRB signatory and the necessary requirements thereafter.
Omar Shaikh
Founder of UKIFC and CEO of GEFI
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