Sustainable banking in developing economies

Abstract

Sustainable banking involves carrying out the business of banking and investment while prioritising environmental sustainability and social responsibility. It entails incorporating environmental, social and governance (ESG) considerations in the delivery of banking services. The benefits of sustainable banking, which range from increased financial inclusion to improved brand and reputation of banks and investor confidence, have caused banks to shift from simply managing their environmental and social risks to exploring new opportunities offered by sustainability principles in a proactive manner. This chapter examines trends and developments in sustainable banking with specific focus on developing markets. Specifically, it covers sustainable banking activities and the importance of sustainable banking. It discusses the concept of triple bottom line with respect to sustainable banking, and the interconnectivity among essentials of the triple bottom line theory. The chapter also examines sustainable banking principles, policies and practices in Africa. It concludes with important policy implications.