The stability of financial institutions is a critical factor that underpins flourishing societies. One of the most important elements of financial stability is a banking system that can be trusted. BDO Unibank Inc. (BDO), based in the Philippines, is putting sustainable society and communities at the heart of its operations to promote collaboration between stakeholders from all parts of the country to achieve sustainable development goals.
Nestor V. Tan, President and CEO at BDO, says that it is important that nobody is left behind:
“Our mission is to be the preferred bank in every market we serve. And therefore we make sure that our products, services and values are consistent with our stakeholders’ needs, aspirations and values as well. We empower customers to achieve their goals.”
Teresita T. Sy, Chairperson at BDO says that these goals are increasingly arranged around sustainability, which is an integral part of the Bank’s offer:
“We do express through our partners, our clients and our employees, our goals in terms of the sustainability program, in terms of a cleaner environment, financing infrastructure or industries that are looking into clean energy and a sustainable environment.”
In 2018, BDO adopted the 17 United Nations Sustainable Development Goals (SDGs) as the cornerstone of their sustainability strategy. Nestor V. Tan is keen to point out that this is not mere window dressing:
“The approach that we have done is to embed the SDGs in the way we do business, the way we assess clients, relationships and counterparties, the way we assess credit and business opportunities, the way we create products and handle client servicing, the way we behave, like turning the lights off when nobody’s there. All our decision-making processes consider ESG principles.”
ESG criteria has now been incorporated to recraft existing policies. Along with the SDGs, these criteria have given the bank a structure with which to design operations and provide guardrails for decision-making. The long-term philosophy and aims of the Bank may not have changed, but the approach is firmly sustainable.
Luis S. Reyes Jr., Executive Vice President for Investor Relations & Corporate Planning at BDO says that one of the most important aspects of the approach lies in how they make investments:
“Sustainable finance is important to BDO in the sense that we started with it about 10 years ago, with the help of the International Finance Corporation. They helped us establish what is called a social and environmental management system, which became the foundation for our sustainable finance framework today.”
As Teresita T. Sy observes, the rising stock of sustainability means that investors vote with their cash which has an impact on the funding climate:
“With the green financing, we can encourage clients who are looking into sustainability returns, not only the short term returns. So we have been focusing on financing those clients and thus it encouraged people to be along the sustainability route to have an easier financing.”
Proof of the changing mood lies in the sustainable finance portfolio built by the Bank, particularly in the area of renewable energy. Since 2019, BDO has stopped financing new coal projects, preferring instead to back geothermal, hydro, biomass, solar, and wind power, along with green construction and energy efficiency projects.
Another major change is that there is a huge untapped market for consumer banking: 71 percent of the country’s adult population, according to the Banko Sentral ng Pilipinas — remain unbanked. BDO drives financial inclusion through BDO Network Bank Inc., its community bank subsidiary focused on lending to micro, small, and medium entrepreneurs in provinces and rural areas, which would have had a very difficult time surviving the pandemic. Then there is also the Cash Agad banking solution (based on the Filipino words for “cash on demand”). Federico P. Tancongco, Senior Vice President & Chief Compliance Officer at BDO says
“Cash Agad allows debit and prepaid card holders to perform banking transactions through the use of point-of-sale terminals deployed to remote areas being used by small enterprise partner agents. Customers can do banking without having to leave their community, while we help small enterprises grow their own businesses because the first point of use of the cash is actually their own business.”
Nestor V. Tan says developing nations will move at a slower pace than wealthier nations, but the Bank’s enthusiasm and commitment for change in its sustainability journey is the same.
As Federico P. Tancongco states, “When we say we find ways, that is not a marketing statement, that is a statement of identity. This is who we are, and this is where we stand. And this is where we fight for our people and for our country.”
Article Source: https://vision2045.com/philippine-banks-must-drive-sustainability-and-find-ways-to-reach-the-unbanked/
