IFC Promotes Sustainable Banking in the Middle East
Monday, February 4, 2008
Lars Thunell, Executive Vice President and CEO of IFC, a member of the World Bank Group, discussed sustainable banking today with the Middle Eastern banking community. He explained how the integration of social, environmental, and corporate governance objectives into financial institutions’ strategy can help them better manage risks and create new investment opportunities.
Thunell spoke at a joint IFC and Financial Times dinner, where banks discussed how they can make sustainability a bigger focus of their operations. Thunell talked about the upcoming 2008 FT Sustainable Banking Awards and encouraged the region?s banks to submit applications.
“More and more Banks are recognizing that sustainability is a way of developing strong brand value and building new business lines,” said Thunell. “Banks are differentiating themselves by offering innovative sustainable financial products. These include loans to women entrepreneurs, as well as microfinance or insurance for people without access to financial services.”
The FT Sustainable Banking Awards will focus this year on the ’bottom of the economic pyramid’, the 4 billion lower-income people worldwide who together represent a $5 trillion market but who, for the most part, have no access to financial services.
Sustainable banking is good business. Out of 120 client commercial banks from 43 emerging markets that IFC surveyed in 2005, almost 40 percent said that focusing on sustainability improved their brand value and reputation. Some 48 percent cited better access to international capital, while 35 percent developed new business lines targeted to sustainability. Additionally, greater transparency and improvements in organization and management can be advantages when a bank is looking to expand into other markets or acquire other banks.
Attendees at the IFC-FT dinner also discussed corporate governance as another opportunity for financial institutions. An increasing body of research shows that private and public companies benefit by adopting best practices in corporate governance.
“Greater transparency and improvements in organization and management can be advantages when a bank is looking to expand into other markets or acquire other banks,” added Thunell.
IFC and the Financial Times launched the Sustainable Banking Awards in 2006 to encourage innovation in sustainability. The awards recognize banks that have shown leadership and innovation in integrating social, environmental, and corporate governance objectives into their operations.
About the FT Sustainable Banking Awards
For 2008, applications are being accepted in five categories.
Four of the categories — Sustainable Bank of the Year, Sustainable Deal of the Year, Award for Banking at the Bottom of the Pyramid, and Sustainable Investor of the Year — will each have a shortlist of five finalists.
For the fifth category — Emerging Markets Sustainable Bank of the Year — the winner will be chosen from among four banks that are awarded prizes for regional leadership. The regions are Asia, Eastern Europe, Latin America, and the Middle East/Africa.
The deadline for entries is February 29, 2008. Entry forms can be obtained at: