Bank of Cyprus the first bank to sign the UN's Principles of Responsible Banking

Annita Pavlou, Manager of Investor Relations & ESG at Bank of Cyprus, explains in an interview how the bank - the first to sign the UN's Principles of Responsible Banking - leads the way in shaping a sustainable future for Cyprus, setting an example for other organizations to follow. She also notes that "investors attach great significance to ESG criteria and to how responsible a bank is in terms of the environmental and social impacts arising from its operations."

What's the significance of Responsible Banking for the financial sector?

Banks play an important role in both the economy and society. Through Responsible Banking, banking products and services, as well as relations with society can support and accelerate the change needed for the prosperity of current and future generations and a positive future both for people and the planet.

At the same time Responsible Banking enhances stakeholders' trust in the financial sector, as signatories, in addition to the actions they undertake for the environment and society, also increase their transparency towards their stakeholders. The publishing of detailed reports allows stakeholders to form an opinion on the contribution and progress of banks towards shaping a sustainable future. 

Bank of Cyprus is the first bank in Cyprus to have formally signed the UN's Principles of Responsible Banking - a unique framework for a sustainable banking sector. Whatdoessigningtheseprinciplesmeanfora bank?

As you correctly mentioned, Bank of Cyprus has signed the UN's Principles of Responsible Banking, a unique framework for sustainable banking developed through a collaboration between banks worldwide and the United Nations Environment Programme Finance Initiative (UNEP FI). 

These principles are seen as the leading framework for ensuring that banks’ strategies and practices align with the vision society has set out for its future in the UN Sustainable Development Goals and the Paris Climate Agreement. Banks that have signed the principles join the world's largest global banking community focusing on sustainable finance, sharing best practice and working together in developing practical guidance and pioneering tools of benefit to the entire industry. 


What do banks commit to when signing the UN's Principles of Responsible Banking?

Signatory banks essentially commit to adopting the six Principles of Responsible Banking:

  1. Alignment
  2. Impact & Target setting
  3. Clients & Customers
  4. Stakeholders
  5. Governance and Culture
  6. Transparency and Accountability

 In practice, signatories commit to align their business strategy with individual needs and society's goals as these are expressed in the UN Sustainable Development Goals, the Paris Climate Agreement, and relevant national and regional frameworks, to enhance their positive impact on people  and the environment by limiting any adverse consequences from their operations, to work responsibly with their clients to encourage sustainable practices, to consult and partner with stakeholders to achieve society’s goals, to implement their commitment to the Principles through effective corporate governance and a culture of responsible banking, and to be accountable and transparent in disclosing their progress in implementing these principles and their impact on the bank. 

What obligations do you undertake in relation to your products and services, and also towards your stakeholders?

Bank of Cyprus, as one of the 338 signatory banks worldwide representing some $98.7 trillion of total assets, invites its stakeholders and customers/clients to join it in this endeavor. 

We will work responsibly with our customers and stakeholders, encouraging sustainable practices as well as economic activity that creates shared prosperity for current and future generations. We will consult responsibly and collaborate with them in attaining the goals of society and at the same time we will honor our commitment to these principles through effective governance and a culture of responsible banking. Also, we will be reviewing individual and collective implementation of these principles on a regular basis, remaining transparent and responsible vis a vis both our positive and adverse impacts and our contribution to society's goals. 

In this context, and among other actions, we need to identify and measure our impact on the environment and society as a result of our operations. Additionally, we must set and achieve goals in areas with the greatest impacts and disclose our progress. We're also obligated to systematically assess risk and capitalize on opportunities arising from the transition to a more sustainable economy. 

The bank already offers products and services that will help individual clients as well as corporate clients in their green transition. 

In addition to continuously enhancing our relationship with our customers, we will also continue to enrich our contribution to society, particularly in the areas of healthcare, education and the environment, and   continue to offer learning and development opportunities to our staff. 

An example of the above are the recent educational programmes concerning financial literacy, which are offered to the public and will be extended to schools. We want to help people learn basic financial concepts and familiarize themselves with modern methods of conducting banking. With regards to our members of staff, we continue to offer learning and development opportunities, capitalizing on the latest training methods. We also offer wellness programmes aiming to enhance mental, physical, financial and social health. 

The Bank will regularly review individual and collective implementation of these principles, remaining transparent and responsible vis a vis both our positive and adverse impacts and our contribution and progress on matters of corporate governance. 

Describe your main goals for 2024, and how these are consistent with your general strategy.

Our Bank takes into account the challenges in safeguarding the environment and the climate, and we work to improve our environmental and social footprint. Already, as described in our 2022 Sustainable Report, the Bank is committed to including policies and procedures that relate to environmental and societal criteria in the credit underwriting and insurance processes. Our main targets are aligned with our strategy to place even greater emphasis on ESG criteria and avoid sectors with high ESG risks. We are proactively responding to investors' and shareholders' growing demands, while enhancing support to our customers with environmentally friendly services and products.