In a massive boost for climate action and sustainability, 130 major banks signed up for the 'UN Principles for Responsible Banking' initiative on 22 September. Comprising one third of the global banking sector, these institutions have pledged strategically to align their business with the goals of the 'Paris Agreement on Climate Change' and the 'Sustainable Development Goals (SDGs)' while scaling up their contribution to the achievement of both.

It is estimated that addressing the SDG could unlock $12tn in business savings and revenue annually as well as create 380m more jobs by 2030. Other businesses in the financial services sector such as insurance stand to benefit by signing a similar agreement as well given how climate change is a widely contended issue for the sector.

“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,” said UN secretary-general António Guterres speaking at the launch event of the initiative attended by the 130 founding signatories and over 45 of their CEOs.

The initiative was introduced a day ahead of the UN Climate Action Summit which was hosted in New York, USA on 23 September.

While action on climate change is growing, it is still far short of what is needed to meet the 1.5 Celsius target of the Paris agreement. Meanwhile, biodiversity continues to decline at alarming rates and pollution claims millions of lives each year. A step change in investment from the private sector is needed to tackle these challenges.

The principles are supported by a strong implementation framework that defines clear accountabilities and requires each bank to set, publish and work towards ambitious targets. By creating a common framework, banks are guided in growing their business and reducing risks.

“As the banking sector provides over 90% of the financing in developing countries and over two thirds worldwide, the principles are a crucial step towards meeting the world’s sustainable development financing requirements,” said United Nations Framework Convention on Climate Change executive secretary Christiana Figueres.