new code for financial sectorSeptember 2002
Eleven European companies and investment institutions have signed a set of seven principles intended to clarify how financial markets can encourage sustainable development.
The London Principles on Sustainable Finance, which were commissioned by the Corporation of London, commit signatories, among other things, to provide greater access to financial products for the socially excluded and to ‘use equity ownership to promote corporate social responsibility’.
The signatories include the Association of British Insurers, CIS, Co-operative Bank, Friends Ivory & Sime, Societe Generale, Storebrand and the Universities Superannuation Scheme. Around a dozen other organizations have expressed interest.
Aside from the principles themselves, the Corporation of London has also published case studies of best practice in sustainable development by financial firms.
It intends to support the initiative with ‘blue skies thinking’ on how such companies can become more socially responsible. It will also develop a mechanism to ensure signatories demonstrate ‘continual progress’ against the principles, which will be presented at the World Summit on Sustainable Development in Johannesburg this month. Their publication has been much delayed after initial hopes that they would be made public in March.
However, Friends of the Earth policy officer Simon McRae said: ‘They are pointless, just seven vague principles and a whole lot of best practice. We don’t need another set of voluntary principles.’
McRae said the ground they covered had already been staked out by the United Nations Environment Programme’s Financial Initiative, which commits signatories to similar goals. ‘They are just replicating something that is already happening,’ he added.
Simon Mills, environmental co-ordinator at the Corporation of London, said the Unep initiative focused more on environmental matters. ‘There is nothing at present that looks specifically at the role of the financial services sector in terms of sustainable development,’ he added.
The principles will be promoted around the world under a memorandum of understanding with the Unep initiative.
The Corporation of London spent £100,000 ($154,000) on the principles, which it developed with Forum for the Future.
They were drawn up after interviews with 50 mainstream financial institutions and a consultative conference in London. The work has been supported by the UK Department of Environment, Food and Rural Affairs, which has also backed a similar initiative called Forge Two. This involves a group of UK financial firms producing CSR guidelines for the sector (EP3, issue 10).
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