5 May 2017 10:00 am Views - 711
IFC, a member of the World Bank Group, is partnering with Nepal Rastra Bank (NRB), the central monetary authority of Nepal, to help the bank adopt improved environmental and social risk management practices to strengthen their portfolio performance, generate business opportunities and boost competitiveness in the region.
Improved risk management practices will help minimize potential risks for financial institutions and will create increased access to financing for businesses with strong environment and social performance.
As part of this programme, IFC will assist NRB in adopting a robust Environmental and Social Risk Management Guideline and promoting its adoption by financial institutions in Nepal. At a workshop held yesterday in Kathmandu, senior representatives from government, the financial sector and international organisations came together to share information, propose ideas and build a consensus on how Nepal’s financial sector can better identify, manage and
mitigate risks.
“We want to help financial institutions effectively manage environmental and social risks associated with the projects they finance and increase support to businesses that are greener, climate friendly and socially inclusive,” said NRB Deputy Governor Shiba Raj Shrestha.
“It is vital that financial institutions come together to establish an effective and robust environmental and social
management system.”
As a member of IFC’s Sustainable Banking Network (SBN), NRB also benefits from the experience and knowledge of other members. The SBN works with associations and regulators to level the playing field for banks and encourage green investment. To date, 15 SBN member countries have launched sustainable finance polices, guidelines and roadmaps.
“Financial institutions can strengthen their portfolio by better assessing risks during loan or investment appraisal, when considering projects,” said IFC Nepal Resident Representative Rehan Rashid.
“IFC has been a long-term partner for Nepal’s financial sector. We help strengthen risk management, enhance competitiveness and support cross-border expansion by helping improve best practices in environmental and social standards including Equator Principles and IFC’s Performance Standards.”
Financial institutions have emerged as ideally placed to help the private sector adapt to new economic realities imposed by climate change impact. In Nepal, the financial sector plays a leading role in sustainable economic growth through lending and investment activities.
IFC is working with banking regulators and financial institutions across Bangladesh, India and Sri Lanka as part of the Sustainable Banking Network – of which NRB is an active member from South Asia.