Benjamin E Diokno: Sustainability in investing

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To Finance Secretary Carlos P. Dominguez
Nationwide Financial and Improvement Authority Undersecretary Rosemarie Edillon;
Ms. Puan Fauziah Hisam, Chairperson of Maybank Philippines Included; 
Ms. Abigail Del Rosario, President and CEO of Maybank Philippines Included;
Chua Hak Bin of Maybank Kim Eng Singapore;
visitors, women and gents, good afternoon.

I’m honored to be right here on the Yr-Finish Market Discussion board for Maybank Philippines’ twenty fifth Anniversary Launch. 

Since Maybank opened its doorways within the nation in November 1997, the financial institution’s community has grown to over 60 branches nationwide. Via your company social duty initiatives and varied neighborhood and sustainability packages, you have been capable of exhibit Maybank’s model of humanizing monetary providers. 

BSP commends Maybank’s sustainability initiatives. 

We acknowledge the Maybank Group’s long-term commitments launched in July 2021, together with the mobilization of fifty billion Malaysian Ringgit in sustainable finance by 2025, carbon impartial place by 2030, and net-zero place by 2050. 

We additionally commend the financial institution’s governance reforms reflecting its need to combine sustainability ideas in its company construction. 

As banks tackle the “inexperienced and sustainable” path, BSP offers the enabling regulatory atmosphere to drive sustainable finance within the nation. 

BSP can be main by instance. We endeavor to embed sustainability ideas in every little thing we do as an establishment, as guided by BSP’s Sustainable Central Banking Program. 

This program underscores the important roles of the BSP as an enabler, mobilizer, and doer.

As an ENABLER, BSP offers insurance policies and buildings that may assist and facilitate sustainable finance. On this respect, we now have issued the Sustainable Finance and Environmental and Social Threat Administration Frameworks. 

Launched in April 2020, the Sustainable Finance Framework highlights the overarching ideas of integrating sustainability and ESG concerns in banks’ company and threat governance frameworks, enterprise methods and operations. 

This Framework additionally underscores the duties of the board of administrators in institutionalizing sustainability ideas throughout the group. 

Supplementary to that is the Environmental and Social Threat Administration Framework. This framework offers extra detailed supervisory expectations on the administration of environmental and social dangers within the context of credit score and operational dangers.

Amongst these expectations are the gradual improve of mortgage portfolio allocation for inexperienced or sustainable actions or tasks, and the consideration of environmental and social dangers within the banks’ operational threat administration framework. 

These frameworks set the important groundwork in selling sustainable finance and function anchors for succeeding BSP’s coverage issuances. Each frameworks will kick into impact by 2023.

As a MOBILIZER, the BSP leads and evokes its supervised monetary establishments to make environmentally and socially accountable enterprise choices.

Now we have began integrating sustainability ideas in our funding course of with over USD 550 million funding within the Inexperienced Bond Fund managed by the Financial institution for Worldwide Settlements. 

We’re additionally reviewing our funding technique to contemplate strategic allocation of investments towards people who espouse environmental, social, and governance ideas. 

A number of Philippine banks have already began taking part within the rising inexperienced, social, and sustainability bond market. 

Newest figures present that these banks have issued inexperienced, social, and sustainability bonds totalling USD 1.15 billion and PHP 85.4 billion in each overseas and native foreign money denominated bonds, respectively. 

Amid the pandemic, two banks issued social bonds value roughly PHP 29 billion to finance or refinance the wants of eligible micro, small, and medium enterprises. Issuances by Philippine corporations, together with banks, reached USD 4.8 billion or 28 p.c of the overall ASEAN-labelled Inexperienced, Social, and Sustainability Bonds as of end-October 2021.

Local weather-proofing the monetary system offers progress alternatives for banks reminiscent of Maybank.

Only in the near past, we witnessed the landmark local weather summit unfold at COP26 in Glasgow. The world’s monetary leaders dedicated to fund the shift to cut back carbon emissions. Personal capital was additionally pledged by the Glasgow Monetary Alliance for Web Zero towards the transition to a net-zero economic system. 

Accordingly, the newest Philippine Vitality Plan targets 50 thousand megawatts of renewable power beneath a clear power state of affairs by 2040, or equal to 54.3 p.c of the overall power combine. 

In step with this, banks, like Maybank, ought to begin investing in sustainable monetary services as contribution in attaining the nation’s carbon emission discount targets. 

One other alternative is the introduction of different revolutionary sustainable monetary merchandise to fund the submit COVID-19 restoration of the MSMEs and agricultural sectors, which have been vastly hit by the pandemic. 

We imagine that these alternatives complement the Maybank Group’s long-term sustainability targets. 

As I finish my presentation, let me guarantee that the BSP will stay steadfast in main sustainability ideas within the banking sector, in keeping with our nationwide aspirations for sustainable improvement.  

Congratulations to Maybank Philippines Included in your silver anniversary.  Thanks and Mabuhay!

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