State-owned Development Bank of the Philippines last month became one of the Founding Signatories of the Principles for Responsible Banking, committing to strategically align its business with the Sustainable Development Goals and the Paris Agreement on Climate Change.
By signing the Principles for Responsible Banking, DBP joins a coalition of 130 banks worldwide, representing over US$47-trillion in assets, in committing to taking on a crucial role in helping to achieve a sustainable future.
Taking place at the start of the UN General Assembly last month, the official launch of the Principles for Responsible Banking marked the beginning of the most significant partnership to date between the global banking industry and the UN. “The UN Principles for Responsible Banking are a guide for the global banking industry to respond to, drive and benefit from a sustainable development economy. The Principles create the accountability that can realize responsibility, and the ambition that can drive action,” said UN Secretary-General Antonio Guterres at the launch event, attended by the 130 Founding Signatories and over 45 of their CEOs.
As expressed in the Principles for Responsible Banking, DBP is convinced that “only in an inclusive society founded on human dignity, equality and the sustainable use of natural resources can our clients, customers and businesses thrive.”
By signing up to the Principles, the banks commit to “using our products, services and relationships to support and accelerate the fundamental changes in our economies and lifestyles necessary to achieve shared prosperity for both current and future generations.”
“A banking industry that plans for the risks associated with climate change and other environmental challenges can not only drive the transition to low-carbon and climate-resilient economies, it can benefit from it,” said Inger Andersen, Executive Director of the United Nations Environment Programme (UNEP). “When the financial system shifts its capital away from resource-hungry, brown investments to those that back nature as solution, everybody wins in the long-term.”
The Principles for Responsible Banking are supported by a strong implementation and accountability framework. By signing them, DBP commits to being transparent on both its positive andnegative impact on people and planet. DBP will focus where it has the greatest impact – in its core business – and set, publish and implement ambitious targets to scale up positive and address any negative impacts in line with global and local goals.
DBP President and Chief Executive Officer Emmanuel G. Herbosa said, “Sustainable and responsible banking practices have always been at the core of DBP’s operations. By being one of the founding signatories of the Principles for Responsible Banking, DBP re-affirms its commitment to protecting the planet and ensuring a sustainable and prosperous tomorrow for future generations.”
The Principles for Responsible Banking will provide DBP with an effective framework to systematically identify and seize new business opportunities created by the emerging sustainable development economy, while at the same time enabling the bank to effectively identify and address related risks.
The Principles for Responsible Banking were developed by a core group of 30 Founding Banks through an innovative global partnership between banks and the UNEP Finance Initiative (UNEP FI).UNEP FI is the UN-private sector collaboration that includes membership of more than 250 finance institutions around the globe.
Meanwhile, DBP is looking to raise P5-billion from the initial tranche of its proposed P50-billion Sustainability Bond Programme aimed at financing environmental and social projects eligible under its Sustainability Finance Framework, a top official said.
DBP President and Chief Executive Officer Emmanuel G. Herbosa said during the institutional investors’ briefing held recently at the DBP head office in Makati City that proceeds from the bonds will be exclusively used to fund projects that contribute to economic inclusion; environmental objectives such as climate change mitigation and adaptation, natural resource conservation, and pollution control and prevention; as well as projects that directly address or mitigate a specific social issue.
“As a development financing institution, DBP has always been at the forefront of sustainable development and environmental protection. The DBPSustainability bonds issuance affirms our commitment to continue supporting initiatives that have an impact not only on communities but also on our environment,” he said.
DBP’s proposed two-year bonds have an initial pricing guidance of 4.25% per annum with final pricing targeted to be determined on October 18, 2019. This will be followed by an eight-day public offer period. Issue and listing date is targeted on November 11, 2019.
Herbosa said DBP’s sustainability framework provides for proceeds being raised to fund or refinance new and existing green or social assets. “We are working with the Securities and Exchange Commission to align the bond issuance with ASEAN Sustainability Bonds Standards, given their Sustainability Framework.”
Standard Chartered Bank is the Structuring Advisor and Issue Manager, and together with China Bank Capital, the Joint Lead Arrangers, for the establishment of DBP’s P50-billion Sustainability Bond Programme.
Standard Chartered Bank Philippines Chief Executive Officer Lynette V. Ortiz sharedthat current market conditions have been conducive for capital markets issuances. “We take great pride in having been able to assist DBP in structuring its Sustainability Bond framework to align with international standards.”
China Bank Capital Corporation President Ryan Martin L. Tapia, meanwhile, said: “It has been awhile since DBP last tapped the Philippine capital markets and their proposed issuance not just provides for a sound investment for our portfolio managers and retail investors, but also brings another opportunity for direct investing in nation building.”