The Central Bank of the Philippines (BSP) has issued new guidelines updating its expectations for how banks should integrate sustainability principles in their investment activities. A draft version, published in May, listed three recommended approaches to help banks assess the sustainability of prospective investments: integration, screening and thematic. The new guidelines set expectations on the prudent conduct of investment activities and the minimum practices that banks should establish for the management and control of risks associated with investments, the BSP said. The BSP expects banks to have systems in place to manage risks arising from their investment activities through board and senior management oversight, policies, procedures, and limits as well as risk measurement, monitoring, and management information systems. “Given the impact of investments on the risk profile of an institution, banks shall ensure that they possess the capability to measure and monitor the risks associated with their investments prior to acquisition and periodically thereafter,” the BSP said.
