The Bank of Ghana has highlighted the importance of Environmental, Social and Governance, ESG, issues and the need for banks to have processes in place to assess the impact on their businesses.
This, the Central Bank notes will help financial institutions to survive the current disruptive challenges facing the banking sector and the economy as a whole.
Head of Banking Supervision at the Bank of Ghana, Osei Gyasi, made the call on behalf of the Governor of the Central Bank, Dr. Ernest Addison at the 26th National Banking Conference in Accra.
“Banking professionals are expected to adhere to best practices and ethical standards that will engender public trust and confidence in the banking sector. The imperatives of ESG, which is now seen as a major risk also with sound opportunities in the banking sector cannot be over-emphasized. ESG risks we all know impact both banks and stakeholders hence the need for banks to critically assess these risks,” he said.
With ESG issues expected to brighten the future of the banking sector, he said domestic banks must do more to attract sustainable investments.
“Investors are now concerned about ESG performance and how they are reported, especially the impact of ESG on the balance of banks. Data compilation and analysis of ESG activities have become imperative in this rapidly evolving industry,” he said.
While there is heightened focus on the environmental and social aspects, Mr. Gyasi said recent developments in the nation’s financial landscape prove that significant emphasis must be placed on corporate governance.
He thus charged stakeholders in the industry not to treat guidelines and directives as mere checklists, but ensure that they are implemented as intended.
“The business of banking is evolving rapidly, hence there’s a need to be intentional in strict adherence to individual codes of ethics and professionalism; as well as the Chartered Institute of Bankers, CIB, and the Ghana Association of Banks, GAB, code of ethics and banking practice in our various banks,” he added.