The Development Bank Ghana (DBG) has partnered with the World Bank and the Ministry of Finance, in a joint effort to bolster Environmental, Social, and Governance (ESG) compliance within the financial sector through the maiden engagement of key players in the industry.

The focus of this collaboration is to empower financial institutions operating within the commercial banking sector, savings and loans, and finance houses with the tools and knowledge necessary to establish robust environmental and social management systems in alignment with the sustainable banking principles introduced by the Bank of Ghana.

Mr. John Boateng Akuoko-Tawiah, Head of ESG, Sustainability & Climate Finance at the Development Bank Ghana, emphasized the significance of this initiative, saying: “We are convening this workshop for our financial institutions within the commercial banking sector, savings and loans, and finance houses. The goal is to enhance the capacity of our current partners and potential partners of DBG.”

“We aim to help them establish robust environmental and social management systems in line with the sustainable banking principles introduced by the Bank of Ghana,” he added.

DBG’s involvement in this process is driven by the requirement for partner banks to implement well-structured environmental and social management systems. In this regard, DBG extends support and technology to expedite the implementation of these guidelines, recognizing their pivotal role in the development of the financial sector.

“Our long-term aim is to expand the number of partner banks beyond the current three commercial banks. We believe this is essential to facilitate the inflow of capital into Ghana for development and the private sector. Partner banks need to meet specific criteria, including financial performance and alignment with DBG’s mandates,” Mr. Akuoko-Tawiah stated.

DBG plans to launch initiatives at the beginning of the 2024, with partnerships with leading institutions and academia. The objective is to establish a Center of Excellence focused on environmental and social governance and sustainable finance. This center will provide comprehensive training and support, ultimately transforming the financial sector and benefiting the private sector.

This International Center of Excellence aims to build ESG Excellence and Capacity of Financial institutions partners, while transforming MSMEs to be ESG Compliant.

Furthermore, the Centre will advance sustainable financing products to contribute to Nationally determined Contributions (NDCs) to support DBG Green Finance and Investment Programmes; as well as promote sustainability reporting and impact measurement.

Otwiwa Offei-Akoto, Director of Wholesale Financing & Credit Origination at DBG, conveyed the institution’s dedication to strengthening the environmental and social management capacity of Ghana’s financial institutions and stakeholders.

She stated, “Our collective aim is to ensure the effective implementation of environmental and social management in the financial sector. We also hope that the sessions over the next few days will fully equip DBG’s partner financial institutions and potential partners to evaluate and mitigate the inherent E&S exposures in their credit decisions.”

The program aims to accelerate the compliance of Ghana’s banks with the Bank of Ghana Sustainable Banking Principles, positioning them better to receive development financing from DBG.

“At DBG, the outcomes of the interventions we are deploying with our partners in the economy is something we keep a razor-sharp focus on. We define success as the outcomes that support the building up of a resilient private sector and economy and improve the lives of the people we serve,” she stated.

Speaking at the event, Mr. Andy Ameckson, Head of Banking & Non Banking Unit, at the Ministry of Finance, representing Mr. Sampson Akligoh, the Director Financial Sector Division, emphasized the crucial role of Environmental and Social Risk Management in supporting sustainable development projects in Ghana.

Effective risk management practices align DBG’s operations with international sustainability standards, mitigating potential negative impacts while enhancing positive social and environmental outcomes of financed projects.

“This workshop is designed to help financial institutions (FIs) better understand environmental and social risk management, sustainable finance, and explore sustainability-related business opportunities,” Mr. Akligoh stated.

He emphasized that DBG seeks to align its activities with the Sustainable Development Goals (SDGs) by effectively implementing its environmental and social management system, contributing to the achievement of the SDGs, particularly SDG 13 on Climate Action.

Mr. Ameckson explained, “Environmental risk management ensures that projects financed by DBG are designed and implemented in a manner that minimizes negative impacts on the environment. By avoiding or mitigating issues such as deforestation, pollution, and habitat destruction, the bank helps ensure that projects contribute positively to local development, enhance livelihoods, foster social cohesion, and guarantee long-term economic viability.”