MANILA – The Bangko Sentral ng Pilipinas (BSP) is set to issue by June a circular which would govern local lenders on environmental and social governance (ESG) standards.
“Hopefully siguro by June we can have it issued,” BSP Deputy Governor Chuchi Fonacier said in an interview with reporters on the sidelines of the Sustainable Finance Dialogue Forum in Makati.
“We’re trying to finalize it itong May, we’re trying to finalize it within May for exposure to the industry, and then we’ll receive comments,” she elaborated.
She was referring to a proposed policy framework on sustainable finance, which seeks to provide high-level principles and broad expectations on the integration of ESGs and sustainability principles.
These will then be incorporated in the corporate and risk governance framework, as well as business strategies and operations of banks.
“The proposed policy expects banks to conduct scenario analysis to assess their vulnerabilities over several ESG scenarios and incorporate such results in their capital planning exercises,” Fonacier said in a speech during the event.
“Banks shall be given flexibility with respect to managing environmental and social (E&S) risk. We are looking at initially adopting a ‘comply or explain’ approach as we transition to higher expectations in this respect,” she explained.
Fonacier said the circular to be released in June will only be a general guideline, as specifics could be done later, in collaboration with other government agencies such as the Department of Energy (DOE) and the Climate Change Commission.
“It will be a circular, high level principles lang siya, hindi siya detalyado. We can provide other guidance as we have this collaboration with the other agencies,” she said.
“We’re not including it in the circular, the nitty-gritty,” added Fonacier. (GMA News)
