International Finance Corporation (IFC), a member of the World Bank Group, has partnered with Mongolian Bankers Association to introduce and implement sustainable banking practices to help financial institutions improve their environmental and social risk management, and contribute to greener and equitable economic growth.
It was reported at ifc.org- IFC’s official website on Tuesday.
IFC will support the Mongolian Bankers Association’s plan to develop the Mongolian Sustainable Banking Principles and industry guidelines by mid-2015. The guidelines will be based on international benchmarks such as the IFC Performance Standards, the World Bank Group Environmental, Health and Safety Guidelines, and the Equator Principles, a credit risk management framework for determining, assessing and managing environmental and social risk in project-finance transactions. IFC will also help build capacity in local banks, consulting firms, and training institutions to achieve this goal.
“The partnership with IFC is part of ongoing efforts by Mongolian banks to contribute to green and inclusive economic development in Mongolia,” said Norihiko Kato, Vice President of the Mongolian Bankers Association. “With help from IFC, the association will provide technical resources and knowledge to help our members improve their sustainable banking systems and products.”
The Mongolian Bankers Association is a self-regulated professional body initiated by 13 commercial banks, one development bank, four financial and non-financial banking institutions, and three foreign bank representative offices. Its vision is to lead the banking and financial sector in supporting the sustainable development and equitable economic growth of Mongolia.
“The project will enhance risk management and expand lending to socially and environmentally friendly projects. This will help generate real results toward greener growth,” said Tuyen D. Nguyen, IFC Resident Representative in Mongolia. “IFC’s experience globally and in Asia has demonstrated a strong business case for sustainable banking.”
In addition to investments across multiple sectors in Mongolia, IFC is supporting this sustainable finance initiative through the Environmental and Social Standards for Financial Institutions Program in East Asia and the Pacific. The program provides advice to help improve the environmental and social sustainability of banks in China, Indonesia, Mongolia, the Philippines, Thailand, and Vietnam.
Mongolia – well-known for its rich natural resources – is committed to a low-carbon development path. Mongolian banks have been discussing sustainability issues with other stakeholders such as government agencies and corporate, it says. Last November, 14 of the lenders publicly declared their commitment to promoting sustainable banking practices in the country.