ESG framework launched for Uganda Bankers

 



Uganda’s Deputy Governor for Bank of Uganda Martin Atingi Ego has launched the Environmental, Social and Governance (ESG) for the banking and financial sector in Uganda.

According to him, the ESG as it is popularly known, is important because the associated risks and impacts align with the evolving market expectations, regulatory scrutiny and changing global needs.

“The ESG Framework for the banking industry is a set of guidelines and principles that will support the Uganda Bankers’ Association (UBA) member financial institutions achieve their sustainability goals, assist their clients in transitioning towards low carbon and resource efficient economies while also supporting financial inclusivity and their social welfare,” said Atingi while launching the framework in Kampala.

The aim of this framework Atingi added is to guide the members of the Uganda Bankers’ Association in establishing a systematic approach towards managing opportunities and risks related to environmental, social and governance criteria as guided by relevant regulatory guidelines  such as Global reporting initiative (GRI), Sustainability Accounting Standards Board (SASB), International Sustainability Standards Board (ISSB), International Capital Markets Association, Green Bond Principles and Social Bond Principles (SBP)

 Through this framework, Uganda Bankers’ Association aims to support Uganda in achieving its sustainable goals while ensuring financial inclusivity and the social welfare of the population, support Bank of Uganda’s ambition of promoting sustainability practices within Uganda’s banking sector and enabling the adoption of sustainability objectives among Uganda Bankers Association member financial institutions by embedding ESG considerations into their operations and policies.

The Framework also aims at providing and communicating a strategic ESG framework, combining global best practices contextualized to the Ugandan Landscape.

 Wilbrod Owor, the Uganda Bankers Association Executive Director, said the key pillars of this framework is ESG Governance, which speaks to understanding its capabilities and opportunities at all levels of the Uganda Bankers Association member institutions right from the Board level, management, training needs, IT and officer.

“The other pillar is Sustainable Finance that provides guidance on formulating sustainable finance framework for green, social and sustainable bonds covering four core components of process of project evaluation and selection, use of proceeds, management of proceeds and reporting,” said Owor.

The other pillars are ESG Risk Management and ESG reporting and disclosures, which provides guidance on identification and management of potential sources of ESG and climate related risks, their direct/indirect impacts on other risk sub types over the short, medium and long term and guidance on reporting the ESG metrics identified from the comprehensive ESG framework developed respectively.

Owor said the framework will be implemented over a long-term period of 36 months in two (2) phases.

“Phase 1 will comprise the communication and engagement of bank staff with the member institutions aimed at improving the understanding and awareness on ESG from the Board level down to the officer level. The Uganda Institute of Banking and Financial Services will support this aspect.

“An industry communication and engagement plan has been developed to support with aspects of internal support among staff both at Headquarter and Branches and ultimately enable external communication and support to bank customers in Phase 2,” said Owor.

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