Banks

The Positive Impact (PI) Model Frameworks provide guidance on integrating holistic impact analysis into business processes and decision-making, spanning different business lines and asset types. They can be used by financial institutions and other third parties, such as auditors. The Model Framework covers financial products for corporates where the funds raised or guarantees issued are used at the corporate’s discretion, without any specified use.

Use this resource for the following Actions of Impact Management:

• Implement: Deliver positive impact financial products. The PI Model Frameworks enables financial institutions and intermediaries to develop appropriate framework (or adapt existing frameworks) to inform decision-making (i.e. on financing /investments), support PI financial product development, to continually analyse and monitor portfolios; and verify and/or provide opinions on the PI nature of financial products.

The Model Frameworks provide guidance on integrating holistic impact analysis into business processes and decision-making, spanning different business lines and asset types. They can be used by financial institutions, as well as by third parties such as auditors. This Model Framework covers Financial Products where the funds raised or guarantees issued are used for a specific purpose, in this case Project-related finance within the scope of the Equator Principles.

Use this resource to:

• Deliver positive impact financial products. The PI Model Frameworks enables financial institutions or intermediaries to develop appropriate frameworks or adapt their existing frameworks to serve a number of purposes: for decision-making (i.e. on financing /investments); for the development of PI financial products, or for on-going analysis/monitoring of portfolios; and
  
• Verify and/or provide opinions on the PI nature of financial products.

Signatories to the Principles for Responsible Banking (PRB) must use the reporting and self-assessment template as part of the requirements of the Principles.

Use this resource to:

• Show progress on implementing the Principles for Responsible Banking;
• Provide transparency about impacts and contributions; and
• Assess if PRB requirements are being met and obtain assurance.

The Impact Protocol provides a step-by-step guide of how to analyse and manage a bank’s portfolio impacts, as per UNEP FI’s holistic impact approach and in alignment with the requirements of the Principles for Responsible Banking. The Protocol provides an overview of the impact management process as a whole and is complemented by other UNEP FI resources including the Impact Management Tool and the Thematic Target-Setting Guidance, which can be used to operationalise the Protocol.

This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.

The Principles for Responsible Banking (PRB) provide target-setting guidance on topics such as Resource Efficiency & Circular Economy, Biodiversity, Financial Health & Inclusion, Climate and Gender Equality.

Use this resource for the following Actions of Impact Management:

• Set targets and plan: Set targets in line with the requirements of the UN Principles for Responsible Banking.

Tools for investors, companies, cities, states and regions to manage their environmental impacts. The CDP Financial Services Disclosure System allows for a baseline assessment of climate-related risks, opportunities and impacts in financing portfolios; and of how banks, asset owners, asset managers and insurance companies are preparing for the net-zero carbon transition.

Use this resource to:

• Identify: Understand the relevant climate change, forests and water security impacts to measure, based on the organization’s size, sector, and geography.
• Measure, assess and value: Track change in performance over time. Each question in the questionnaire is scored – some with reference to social or ecological thresholds – to help the organisation determine whether it is performing sustainably on that topic.
• Communicate: Report to all stakeholders on climate change, forests and water security. The questionnaires provide a framework for companies to report environmental information to their stakeholders covering governance and policy, risks and opportunity management, environmental targets and strategy, and scenario analysis. Receive an A-D grading based on questionnaire responses.
• Benchmarking and rating: Benchmark environmental performance against industry peers and receive feedback on progress each year. The information disclosed is also used by financial markets for stewardship and engagement, in investment research, new financial products, and global indices and ratings.

Regulation that sets out sustainability disclosure requirements for financial market participants within the EU. It includes disclosure requirements for firm-level as well as for investment products. Disclosure requirements cover mitigation of negative impacts termed ‘principal adverse impacts’ and performance on sustainable investment objectives.

Use this resource to:

• Communicate: Review regulation for disclosure requirements for financial market participants in the EU

The EU Climate Transition Benchmarks (CTB) and Paris-Aligned Benchmarks (PAB) are examples of portfolio impact benchmarking techniques being employed in regulation. The regulation sets out requirements for index providers to construct investable indexes that are on a 7% decarbonisation trajectory.

Use this resource to:

• Measure, assess and value: Review EU’s proposed approach for establishing benchmarks, which incorporates greenhouse gas emissions at portfolio level. A climate benchmark serves as an investment performance benchmark for GHG emission-related strategies; an engagement tool and a policy benchmark to help guide strategic asset allocation.

The Principles for Responsible Banking (PRB) guide banks in aligning their business strategies with society’s goals, as well as promoting sustainability. These principles aim to encourage banks to play a crucial role in achieving global sustainable development objectives, including addressing climate change, promoting financial inclusion and fostering sustainable economic growth.

This is a cross-cutting resource, meaning that it supports the internal impact management process as a whole, rather than one or a few of the Actions of Impact Management.

The principles provide guidance for financial institutions and their public and private stakeholders to transition to an impact-based economy that can deliver on people’s needs and aspirations within planetary boundaries. The Principles promote Positive Impact Finance as a key solution for bridging the funding gap required to achieve the Sustainable Development Goals (SDGs).

Use this resource for the following Actions of Impact Management:

• Implement: Understand key definitions and requirements for the delivery and assessment of positive impact finance.