December 04, 2008
Principles for Climate Change Developed for Financial Sector
by Robert Kropp
Major financial institutions join with The Climate Group to promote principles of business for a
Taking a proactive approach to climate change can be an effective business strategy for the
financial sector in a low-carbon economy, according to a new set of principles developed by The Climate Group and endorsed by
several major financial institutions.
The Climate Principles: A
Framework for the Finance Sector is the first comprehensive industry framework for the
financial sector's response to climate change and has been adopted by Credit Agricole, HSBC, Munich
Re, Standard Chartered and Swiss Re.
According to the Principles, "the finance sector can
play a unique 'enabling' role in unlocking a low carbon economy." Financial companies can minimize
their operational carbon footprint, make business decisions that reduce climate change risks and
allow the development of climate change related opportunities, and develop products and services
that enable customers to manage their climate change related risks and business opportunities.
In addition to reducing their own operational carbon footprints, financial companies adopting
the Principles agree to engage significant suppliers on climate change issues and work with them to
reduce GHG emissions throughout their supply chains.
In addition to incorporating climate
change related risks and opportunities in the development of investment products, asset managers
agree to engage with the companies in which their clients invest to understand how they are
minimizing the risks and maximizing the opportunities presented by climate change and climate
Corporate banks will develop and implement a methodology for assessing the climate
related risks in their lending and investment practices, and financing solutions to facilitate
investment in low carbon technologies and GHG reduction projects.
The Climate Group will
act as secretariat for The Climate Principles and will review, benchmark, and develop The
Principles to ensure they remain effective in accelerating and advancing robust disclosure and
global best practice.
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