16, Sir William Newton Street
Port Louis, Mauritius
Sustainability has been a buzzword in recent years, but what does the term sustainability really entail for the banking sector? Taking International Finance Corporation’s (IFC) apt definition for this sector, they define sustainability as “ensuring long-term business success while contributing toward economic and social development, a healthy environment, and a stable society.”
Sustainability and Finance: The crucial role of the Mauritian banking sector
Today, events like economic and environmental disasters, geopolitical tensions, depletion of natural resources and pandemics have deep economic and social consequences around the world and our little Mauritius is not being spared either. The private sector at large has understood that sustainability is not limited to the creation of financial and economic value but also encompasses broader objectives such as long-term environmental and social value for their stakeholders, which includes shareholders, employees, customers, suppliers, media, communities, and public-sector partners – with particular consideration for the needs of future generations.
A clear global trend has emerged in the last couple of years and Mauritius is now slowly but surely following the same trend – in other words, following the global transition towards sustainability-driven economies. Many industries acknowledge that the element of sustainability is now becoming an essential criterion of competitive advantage that they can no longer ignore.
The Mauritian banking sector as a major provider of finance for all businesses, regardless of shapes and sizes, plays a pivotal role in promoting environmental and social sustainability across industries, sectors and communities. Let us not underestimate the influence of the banking sector in positively shaping their clients’ environmental and social actions through their products and services. Over the years, traditional banks have launched a plethora of retail and corporate banking green products such as green car loans, green mortgages or green debit cards. Around the world, the demands for such products and other financial instruments such as green bonds are on the rise thus creating an array of opportunities for banks and other financial institutions towards both customers and investors.
Creating Business Value through Environmental and Social Management
For banks, only adopting the ‘traditional’ risk management models (which includes financial and credit risk assessment framework) will not be sufficient to target new markets and generate profits. However, if a bank effectively manages social and environmental opportunities alongside risks, they will be in a better position to create long-term value for their businesses. Although we need to bear in mind that pursuing sustainability-related opportunities alone would not help to reduce the bank’s environmental and social risks!
One may tend to think that that the financial sector in itself does not pollute much or have a high negative social impact as compared to other industries such as manufacturing or non-renewable energy. Yet, did you know that more than 90 percent of a bank’s environmental and social footprint is accounted indirectly through its lending facilities to clients? According to The Economist, investing with an eye on environmental and social issues, rather than just financial returns, is becoming more mainstream. The World is now entering into a ‘sustainable banking era’ and according to the Global Sustainable Investment Alliance (GSIA), USD 31trn or 34% of all assets under management in 2018 were in ‘socially responsible investments’ that take into account environmental, social and governance (ESG) issues.
In the local context and in particular at Bank One, we are fully cognizant of this changing business landscape and we are thrilled to have recently embarked on a new transformational journey to place sustainability at the very heart of our business. With the close support of a major Development Finance Institution (DFI), we are working towards a systematic approach in the form of an Environmental & Social Management System (ESMS) that is fully integrated into our core processes and operations. There is still a long way to go but Bank One is laying the groundwork for a strategy to create long-term value through sustainable banking practices. It means that the Bank will be providing products and services only to those customers that take into consideration the environmental and social impact of their activities.
Bank One is fully prepared for the journey ahead and is gearing for the adoption of sustainability as a holistic approach. This entails capacity building and training as well as setting measurements and standards of performance across the bank. The Environmental & Social Risk Management Framework will act as a complement the other risk management models already in place (ex. operational risk management, credit risk management, etc.). Moreover, an efficient Social & Environmental Risk Management Framework will definitely improve the quality of our client portfolio, lower credit and compliance risk and ultimately the cost of doing business. We believe that pursuing innovative financial solutions and products generates new markets with new clients that have a soft spot for sustainable solutions.
The importance of a strong regulatory framework on the sustainability front for the banking sector in Mauritius.
Our domestic banking system has a strong regulatory framework but, until recently, we were lagging behind compared to some of our African peers when it comes to understanding and managing climate-related risks in the financial sector. However, we are pleased to note that things are moving rapidly in this space, as the BOM became a full-fledged member of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) in July 2020. The NGFS is a platform that promotes the sharing of experience and best practices among central banks and supervisors to address climate risk management. The network also enables its members to work together for a green and sustainable financial system.
I believe that having a strong banking regulation framework with a clear focus on the Sustainable Development agenda is vital in today’s fast-changing environmental and business context. Having the support of the BOM will definitely encourage banks to embed the concept of a greener banking sector in Mauritius in line with the United Nations Sustainable Development Goals and the Paris Agreement.
Sustainability Manager at Bank One
Platform Africa, 28 September 2020
Bank One Disclaimer
Welcome to www.bankone.mu!
Please read the following important information before accessing this Website:
This Website is owned and operated by BANK ONE LIMITED and the use thereof indicate that you accept the Bank’s Terms and Conditions of Use.
If you do not agree to the Terms and Conditions of Use, you should not use the Website.
The Bank may, at its entire discretion, at any time and without notice, modify or update such Terms and Conditions of Use. Such changes shall be effective immediately and you shall be deemed to have accepted same if you continue to use the Website.
Although the Bank endeavours to provide correct information on its Website, it does not give any warranty express or implied as to its accuracy, completeness and reliability.
The Bank does not accept any liability for any errors or omissions of whatsoever nature as regards information, materials, functions and applications contained in its Website or as to any third-party Websites linked to or from its Website.
Terms & Conditions of Use
1) Information available on the Website are allowed to be printed and / or downloaded for personal use only and not for commercial purposes.
You may not reproduce, transmit or store any information contained on the Bank’s Website on any other Website without the Bank’s written permission.
2) The Website is intended to provide general information on the Bank and its products and services.
No information contained on the Website shall constitute or is intended to constitute financial, legal, accounting, investment or other professional advice or services. You are advised to take professional advice from a suitably qualified professional or adviser before taking any decision relating to your finances or business.
3) You acknowledge that information transmitted via the Internet is susceptible to monitoring and interception and you will be bear all risk of using such means. You further acknowledge that any unsolicited information communicated to us via Internet cannot be guaranteed to remain confidential.
4) The Website may contain technical, typographical or other inaccuracies and you are urged to contact us to confirm all information contained on this Website before placing any reliance on it.
5) The Bank agrees to make reasonable efforts to ensure full performance of its Internet Banking transactions. The Bank will be responsible for acting only on those instructions sent through Internet Banking which are actually received. The Bank does not assume responsibility for any malfunctioning in communication facilities not under its control that may affect the accuracy or timeliness of messages you send. The Bank will not be responsible for any losses or delays in transmission of instructions arising or caused by any browser software. It will, furthermore, not be accountable should you provide incorrect instructions or if your payment instructions are not given sufficiently in advance to allow for timely payment or delays in mail service.
Collection of Information
The Bank will not collect any information about you except where it is knowingly provided to us through this Website. The information we collect about you will depend on how you use the facilities offered via this web site.
In the event that you enter information in the process of completion of an online application form, the information will only be collected by us if you submit that online application to us. In other words, if you log out prior to submitting your application, any information which you had entered would be automatically deleted.
The Bank requires information to understand your needs and provide you with a better service, and in particular for the following reasons:
Internal record keeping.
Use the information to improve its products and services.
Sending periodicals and promotional emails on new products, special offers or other information which the Bank thinks you may find interesting using the email address which you have provided.
Our Contact Centre may call you to suggest products and services that are relevant to your needs based on the information you have provided.
Occasionally, the Bank may also use your personal information to contact you for market research purposes.
The Bank may contact you by email, phone, fax or mail and may use the information provided to customise the Website according to your interests.
The Bank will not sell or distribute your personal information to third parties unless it has your permission or is required by law to do so. You may request details of personal information which the Bank holds about you under the Data Protection Act 2004. If you would like a copy of the information held on you, please write to us.
If you believe that any information the Bank is holding on you is incorrect or incomplete, please write to or email us as soon as possible. The Bank will promptly correct any information found to be incorrect.
In no event will the Bank be liable for any damages including but not limited to direct or indirect, special, incidental, consequential or punitive damages, losses or expenses arising out of the use of its Website, or incurred as a result of any failure of performance, transmission of information, any interruption or availability of its Website, delay in operation or transmission, computer virus, loss of data, or otherwise.
Neither the Bank nor its directors, shareholders, agents, consultants, representatives, officers or employees shall be liable for any damages or losses resulting from your use or inability to use its Website or any information contained therein, including without limitation any direct or indirect, special, incidental, consequential or punitive damages whether arising out of contract, statute and tort or otherwise.