The Bank of Ghana has partnered with the International Finance Corporation (IFC) to launch the Ghana Integrated Environment, Social and Governance (IESG) program.
According to Ismail Adam, the Deputy Director of the Banking Supervision Department of the Bank of Ghana, the aim of the program is to promote the uptake of environmental, social, and governance (ESG) good practices in the financial sector and local corporates, thereby achieving a more diversified and resilient economy.
By implementing ESG regulations/guidelines and building regulatory and supervisory capacity within the Bank of Ghana, the program seeks to enhance ESG capacity in the banking industry as well as the capacity of local market intermediaries to become high-quality and sustainable ESG support service providers.
The proposed agreement between the Bank of Ghana and the IFC has several key components that support essential activities. It seeks to provide extended support to Bank of Ghana teams on implementing the Sustainable Banking Principles, bespoke capacity support for the Bank of Ghana based on recommendations from reviews and assessments on the implementation of the Sustainable Banking Principles, and support for the Bank of Ghana as it extends the Sustainable Banking Principles to other financial institutions. Additionally, it will support sector-level training on the Sustainable Banking Principles.
Speaking at the launch of the IFC’s Inte
grated Environment, Social and Governance program, Ismail Adam highlighted that the Bank of Ghana has already undertaken several activities towards the implementation of the Sustainable Banking Practices. He expressed his expectation that the IESG program would complement the efforts of the Bank of Ghana and lead to the full implementation of the Sustainable Banking Principles across the banking industry as well as within the Bank of Ghana itself.
Some key activities that the Bank of Ghana has undertaken towards implementing the Sustainable Banking Practices include building the capacity of staff on the Sustainable Banking Principles and getting a dedicated office within the Bank to oversee their full implementation.
They have also developed a roadmap to ensure banking industry training on all the principles by the end of 2023 and analyzed four rounds of reports received from the banks, beginning in March 2021 and ending in September 2022. The reporting templates received from the banks suggest steady progress with the implementation of the Sustainable Banking Principles, with an average compliance rate of 53.37% as of September 2022.
The partnership between the Bank of Ghana and the IFC is a significant step towards promoting ESG good practices and achieving a more diversified and resilient economy in Ghana. The program’s focus on building regulatory and supervisory capacity within the Bank of Ghana and enhancing the ESG capacity of the banking industry and local market intermediaries will help create a sustainable financial system that benefits both the economy and society.