Discerning banks in Nigeria have begun to embrace the concept of sustainable banking in a bid to enhance their risk management, revenues and reputation as well as comply with the Nigerian sustainable banking principles enunciated by the Central Banking of Nigeria (CBN) in July 2012.
Speaking recently at a media parley organised by First City Monument Bank (FCMB) with the theme:“Sustainable Banking in Nigeria: The Role of the Media,” the group managing director of the bank, Mr Ladi Baolgun, observed that members of the public were not really interested in the size and revenue of the bank but its impact on their lives.
He said this development has made the bank to shift its focus from profit maximisation to how its operations affect the members of the public as well.
He said the development has led to shrinking revenues in the banking industry in the short term as well as enhanced stability and increased reputation for operators.
Also speaking, an expert in the field of sustainable development, who also doubles as the managing director of the Sustainable Finance Advisory, Carey Bohjanen, asked a rhetorical question: Does business as usual still work?
According to her, businesses, especially banks, are being inundated with global issues of population growth, resource constraints, climate change, technology and identity crisis of the banking industry.
Bringing the issue home, Bohjanen noted that in Nigeria, there is a growing population and high rate of unemployment, with about 84 per cent of the population earning less than $2 a day, climate impacts and threats to water resources, agricultural production and crisis in the food sector, social unrest which has brought to the fore legacy issues and potential for social conflict and instability and increasing public demand for accountability and governance and pressure on policy makers.
For Bohjanen, it is against the backdrop that the Nigerian banking sector had to adopt the Nigerian Sustainable Banking Principles July 2012.
The Nigerian Sustainable Banking Principles is anchored on nine principles which include managing environmental and social risk in business decisions, managing the bank’s own environmental and social footprint, safeguarding human rights, promoting women’s economic empowerment, promoting inclusive finance for people and communi8es who have little or no access to the formal financial sector, improving governance, transparency and accountability, supporting
capacity building in the financial sector, promoting collaborative partnerships to accelerate sector progress and Reporting to take stock of sector progress and attendant needs.
She said the new initiative would move the Nigerian banking sector as one to drive development that is economically viable, but socially relevant and environmentally responsible
According to her the development would also enhanced collaboration and cooperation between the banks to achieve transformational change that is consistent with international standards and good practice, thereby signaling enhanced governance that will lead the way for banks in Africa and beyond as well as other sectors
Bohjanen said the rationale for sustainable Banking are it is the right thing to do for Nigeria, it would enhance risk management by banks, enhanced their relationships with the public, increased revenues, reputation as well as make them comply with what the CBN wants.