All 24 commercial banks in the Ghana have signed up to IFC-supported, locally-developed principles that promote environmental and social sustainability.
The seven principles agreed by the country’s largest banks cover a wide range of activities, including integrating environmental and social management into lending decisions, and promoting gender equality, broader financial inclusion, and high ethical and corporate governance standards.
Importantly, the banks, Barclays Bank of Ghana, Ecobank, and GCB Bank among them, have agreed with Ghana’s Central Bank to measure progress and regularly report on how well they—and their clients—are implementing the principles.
Alhassan Andani, CEO of signatory bank Stanbic, said, “These principles will be a bedrock for the revival of banking in Ghana to serve society. We are grateful for the leadership of the Bank of Ghana, the cooperation of the bank CEOs, and the support of IFC for helping bring banking in Ghana in line with current global principles.”
Ghana joined IFC’s Sustainable Banking Network in 2017, a voluntary community of financial sector regulatory agencies and banking associations from emerging markets committed to advancing sustainable finance in line with international good practice.
A rigorous, two-year process supported and guided by IFC’s Environmental and Social Risk Management (ESRM) team began that year, culminating in Ghana’s large commercial banks pledging in July 2019 to integrate the principles’ environmental, social, and governance guidelines into their risk management frameworks.
IFC worked closely with the Bank of Ghana and other Ghanaian partners, including the Environmental Protection Agency and Ghana Association of Bankers, to help draft the principles and bring the banking sector on board.
IFC also convened stakeholders for consultation meetings and advised the Bank of Ghana on its long-term sustainable banking strategy.
Ronke Amoni Ogunsulire, IFC Country Manager for Ghana, said, “The banking sector has an important role to play supporting broad-based, high-impact, sustainable development. With these principles in place, Ghana’s banking sector will be better positioned to manage risks, increase market trust, and attract investment, especially towards green financing.”
The drive to establish and implement the principles is a timely initiative that should support efforts by Ghana’s Central Bank to clean up the country’s banking sector, which recently suffered the collapse of hundreds of second-tier lenders.
Going forward, IFC’s ESRM team will continue working with Ghana’s banking sector and its Central Bank to develop the capacity needed to implement the principles successfully.
In Africa, Kenya and Nigeria have also developed and adopted sector-wide banking principles, supported by IFC’s ESRM team.