The third ABC’s Sustainable Finance Forum touched on IFC Performance Standards and ESG Requirements for Financial Institutions.
The forum was conducted on September 22. It was organized by the Association of Banks in Cambodia is to promote and raise awareness of Sustainable Finance in the Kingdom of Cambodia among the members of the Banking and Financial Institutions.
The third workshop of the series, presided over by Mr. Dith Sochal, Chairman of the Sustainable Finance Committee of The Association of Banks in Cambodia (ABC), and by Ms. Gelina Ermakova, Senior Environment and Social Development Specialist from the International Finance Corporation (IFC) as the guest speaker for the event. The forum drew around 70 Participants from member banks.
The Sustainable Finance Forum is a monthly event, which runs through various topics, with the forum´s intention to help develop practical knowledge of the IFC Performance Standards related to environmental and social risks for banks. IFC continues to leverage its investment and capacity building to support investees to adopt international risk management, corporate governance, and environmental and social standards to improve operations and attract more capital.
Mr.Dith Sochal, Chairman of the Sustainable Finance Committee of ABC, said that an integrating ESG within the mainstream operations and financial analysis will help banks not only preserve and grow the capital, but exercise unique power in contributing towards making our natural environment more resilient.
He added while mainstreaming good ESG practices will also help to ensure preparedness and robust response to crisis, continuance to build trust with investors and stakeholders throughout and create sustainable and resilient businesses over time.
“Lower levels of environment, social and governance (ESG) performance can be a key barrier for sustainable investors to finance companies in developing markets. COVID-19 has proven to be another stress test for many businesses, forcing FIs to rethink the relevance of ESG considerations. While the environmental aspects of ESG remain important to move towards a green and sustainable recovery, the Social ‘S’ and Governance ‘G’ dimensions have been pushed to the forefront during COVID-19,” Mr. Sochal added.
As the Cambodia Sustainable Finance Principles were just introduced 3 years ago, it takes time for Cambodian banks to set up the system and start implementing it. ESG risk management is one of the key focuses but is also a new topic for bankers. Intensive capacity building to equip bankers with related knowledge and skills, especially how international standards and practices can be applicable in Cambodian context is needed to be provided.