Banks in the country have signed the Sustainable Banking Principles and Sector Guidance Notes that binds them to strictly invest only in environmentally friendly projects.
Per the principles, banks in Ghana can reject investment in areas that may promote environmental degradation and pollution.
Speaking at the launch of the guidelines, the Vice President, Dr. Mahamudu Bawumia, urged the central bank to carefully monitor the implementation of the principles to protect the environment.
Dr. Bawumia cautioned that Ghana cannot look on unconcerned as though climate change is a reserve for only advanced countries when its devastating effects can impact Ghana’s economy.
“Environmental risks, and risks arising from climate change in particular constitutes significant systemic risk for the financial sector. Fundamental changes in the environment could affect our economic and financial stability as a nation”.
Citing Europe as an example, Dr. Bawumia stated that it is imperative for Ghana to start implementing such policies to attract the needed investors.
He stated for example that investors are now cautious about where they put their money if it will affect the environment.
He urged the Bank of Ghana to be firm in monitoring the implementation of the principles to help improve Ghana’s ratings on the global stage.
The President of the Ghana Association of Bankers, Alhassan Andani, noted that the implications for not going by the principles are so dire for the environment such that banks will not overlook.
He said it will be in the interest of banks to adhere to the principles since it will be a cardinal requirement in accessing loans on the world market.
“If a business person is doing any kind of project and there is an activity that will damage waterways; or that will damage the environment, we will not support that kind of project,” he explained.
He pointed out that banks are not in business to make profit at the expense of the environment.