Development Bank Ghana (DBG) has partnered the World Bank and Ministry of Finance in a joint effort to bolster environmental, social and governance (ESG) compliance within the financial sector.
At a maiden engagement of key players in the industry, it was explained that the collaboration is to empower financial institutions operating within the commercial banking sector, savings and loans, and finance houses with the tools and knowledge necessary to establish robust environmental and social management systems – in alignment with sustainable banking principles introduced by the Bank of Ghana.
Mr. John Boateng Akuoko-Tawiah, Head-ESG, Sustainability and Climate Finance, Development Bank Ghana said: “We are convening this workshop for our financial institutions within the commercial banking sector, savings and loans, and finance houses. The goal is to enhance the capacity of our current and potential partners.
“We aim to help them establish robust environmental and social management systems in line with the Bank of Ghana’s sustainable banking principles,” he added.
DBG’s involvement in this process is driven by the requirement for partner banks to implement well-structured environmental and social management systems. In this regard, DBG extends support and technology to expedite implementation of these guidelines, recognising their pivotal role in the financial sector’s development.
“Our long-term aim is to expand the number of partner banks beyond the current three commercial one. We believe this is essential to facilitate the inflow of capital to Ghana for development and the private sector. Partner banks need to meet specific criteria, including financial performance and alignment with DBG’s mandates,” Mr. Akuoko-Tawiah stated.
DBG plans to launch initiatives at the beginning of 2024, including partnerships with leading institutions and academia. The objective is to establish a centre of excellence focused on environmental and social governance, and sustainable finance. This centre will provide comprehensive training and support, ultimately transforming the financial sector and benefitting the private sector.
This international centre of excellence aims to build ESG excellence and capacity for financial institution partners, while transforming MSMEs to be ESG-compliant.
Furthermore, the centre will advance sustainable financing products in contribute to nationally determined contributions (NDCs) that support DBG green finance and investment programmes, as well as promote sustainability-reporting and impact measurement.
Otwiwa Offei-Akoto, Director-Wholesale Financing & Credit Origination, DBG, conveyed the institution’s dedication to strengthening the environmental and social management capacity of Ghana’s financial institutions and stakeholders.
She stated: “Our collective aim is to ensure effective implementation of environmental and social management in the financial sector. We also hope that sessions held over the next few days will fully equip DBG’s partner financial institutions and potential partners to evaluate and mitigate the inherent E&S exposures in their credit decisions”.
The programme aims to accelerate banks’ compliance with the Bank of Ghana Sustainable Banking Principles, positioning them better to receive development financing from DBG.
“At DBG, outcomes of the interventions we are deploying with our partners in the economy is something we keep a razor-sharp focus on. We define success as the outcomes that supports building up a resilient private sector and economy, and improves the lives of people we serve,” she stated.
Speaking at the event held at Koforidua in the Eastern Region, Andy Ameckson, Head-Banking and Non Banking Unit, Ministry of Finance – representing Sampson Akligoh, Director-Financial Sector Division, emphasised the crucial role of environmental and social risk management in supporting sustainable development projects.
Effective risk management practices align DBG’s operations with international sustainability standards, mitigating potential negative impacts while enhancing positive social and environmental outcomes of financed projects.
“This workshop is designed to help financial institutions (FIs) better understand environmental and social risk management and sustainable finance, and explore sustainability-related business opportunities,” Mr. Akligoh stated.
He emphasised that DBG seeks to align its activities with the Sustainable Development Goals (SDGs) by effectively implementing its environmental and social management system, contributing to achievement of the SDGs – particularly SDG 13 on climate action.
Mr. Ameckson explained: “Environmental risk management ensures that projects financed by DBG are designed and implemented in a manner that minimises negative impacts on the environment. By avoiding or mitigating issues such as deforestation, pollution and habitat destruction, the bank helps ensure that projects contribute positively to local development, enhance livelihoods, foster social cohesion and guarantee long-term economic viability”.
