UN Reporting Frameworks

The Sustainable Development Goals (SDGs) were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. These 17 SDGs, and the 169 targets within them, provide a clear framework for Member States, organizations, and projects to improve quality of life, the environment and economic progress.

1. No Poverty: Access to basic human needs of health, education, sanitation
2. Zero Hunger: Providing food and humanitarian relief, establishing sustainable food production
3. Good Health and Wellbeing: Better, more accessible health systems to increase life-expectancy
4. Quality Education: Inclusive education to enable upward social mobility and end poverty
5. Gender Equality: Education regardless of gender, advancement of equality laws, fairer representation of women
6. Clean Water and Sanitation: Improving access for billions of people who lack these basic facilities
7. Affordable and Clean Energy: Access to renewable, safe and widely available energy sources for all
8. Decent Work and Economic Growth: Creating jobs for all to improve living standards, providing sustainable economic growth
9. Industry, Innovation and Infrastructure: Generating employment and income through innovation
10. Reduced Inequalities: Reducing income and other inequalities, within and between countries
11. Sustainable Cities and Communities: Making cities safe, inclusive, resilient and sustainable
12. Responsible Consumption and Production: Reversing current consumption trends and promoting a more sustainable future
13. Climate Action: Regulating and reducing emissions and promoting renewable energy
14. Life Below Water: Conservation, promoting marine diversity and regulating fishing practices
15. Life on Land: Reversing man-made deforestation and desertification to sustain all life on earth
16. Peace, Justice and Strong Institutions: Inclusive societies, strong institutions and equal access to justice
17. Partnerships for the Goals: Revitalize strong global partnerships for sustainable development

The Principles for Responsible Banking are a unique framework for ensuring that signatory banks’ strategy and practice align with the vision society has set out for its future in the Sustainable Development Goals and the Paris Climate Agreement.

230 banks have now joined this movement for change, leading the way towards a future in which the banking community makes the kind of positive contribution to people and the planet that society expects.

These banks represent more than a third of the global banking industry. This is a journey of unprecedented scale and scope at a time when such ambition is urgently needed.

The Principles for Responsible Banking

The Principles provide the framework for a sustainable banking system, and help the industry to demonstrate how it makes a positive contribution to society. They embed sustainability at the strategic, portfolio and transactional levels, and across all business areas.

ALIGNMENT We will align our business strategy to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national and regional frameworks.​

IMPACT & TARGET SETTING We will continuously increase our positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from our activities, products and services. To this end, we will set and publish targets where we can have the most significant impacts.

CLIENTS & CUSTOMERS We will work responsibly with our clients and our customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.

STAKEHOLDERS We will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals.

GOVERNANCE & CULTURE We will implement our commitment to these Principles through effective governance and a culture of responsible banking.

TRANSPARENCY & ACCOUNTABILITY We will periodically review our individual and collective implementation of these Principles and be transparent about and accountable for our positive and negative impacts and our contribution to society’s goals.

​What is required from Signatories

230 banks have opted to become signatories because they recognise that the needs and demands of their clients and stakeholders are shifting. Signatory banks commit to taking three key steps which enable them to continuously improve their impact and contribution to society:

1. Analyse their current impact on people and planet
2. Based on this analysis, set targets where they have the most significant impact, and implement them
3. Publicly report on progress

Eighteen months after signing, signatory banks must report on:

• their impact,

• how they are implementing the Principles,

• the targets they have set,

• the progress they have made.

Within four years, signatory banks must have met all these requirements.

The UN Global Compact is a voluntary initiative based on CEO commitments to implement universal sustainbility principles and to take steps to support UN goals.​

The UN Global Compact enjoys the support of the United Nations General Assembly and has additionally been recognized in a number of other inter-governmental contexts, including by the G8. In December 2018, the UN General Assembly renewed the mandate of the Global Compact Office and the UN office that supports the initiative in its Resolution “Towards global partnerships: A principle-based approach to enhanced cooperation between the United Nations and all relevant partners”

The Ten Principles of the United Nations Global Compact are derived from: the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption.

Human Rights

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

Principle 2: make sure that they are not complicit in human rights abuses.

Labour

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

Principle 7: Businesses should support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

The TCFD recommendations on climate-related financial disclosures are widely adoptable and applicable to organizations across sectors and jurisdictions. They are designed to solicit decision-useful, forward-looking information that can be included in mainstream financial filings.

The recommendations are structured around four thematic areas that represent core elements of how organizations operate: governance, strategy, risk management, and metrics and targets.

Governance

Disclose the organization’s governance around climate-related risks and opportunities.

Recommended disclosures

a. Describe the organization’s governance around climate-related risks and opportunities.

b. Describe management’s role in assessing and managing climate-related risks and opportunities.

Strategy

Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material.

Recommended disclosures

a. Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.

b. Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.

c. Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

Risk Management

Disclose how the organization identifies, assesses, and manages climate-related risks.

Recommended disclosures

a. Describe the organization’s processes for identifying and assessing climate-related risks.

b. Describe the organization’s processes for managing climate-related risks.

c. Describe how processes for identifying, assessing, and managing climated-related risks are integrated into the organization’s overall risk management.

Metrics and Targets

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.

Recommended disclosures

a. Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.

b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks.

c. Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

Modern slavery is the severe exploitation of other people for personal or commercial gain. Modern Slavery is often a consideration within supply chain risks, but can be a range of people exposed in both developed and emerging markets. By 2018 legislation intended to reduce the impact of modern slavery on supply chains had been passed by seven of the G20 countries

40 million people are estimated to be trapped in modern slavery worldwide:

• 1 in 4 of them are children.

• Almost three-quarters (71%) are women and girls.

• Over 10,000 were identified as potential victims by the authorities in the UK in 2019.

The most common reporting threshold is an organisation with annual revenue above $100 million is required to report against the government Act. Countries such as the UK developed a Modern Slavery Act in 2015, where a legislated government-run central repository of statements, mandatory prescribed criteria for statements, government are required to report against. A legislated three-year review, and compliance measures against reporting allows the government easy abilities to list entities who don’t report.

The Equator Principles (EPs) is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects and is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making.

The EPs apply globally, to all industry sectors and to five financial products: 1) Project Finance Advisory Services, 2) Project Finance, 3) Project-Related Corporate Loans, and 4) Bridge Loans and 5) Project-Related Refinance, and Project-Related Acquisition Finance. The relevant thresholds and criteria for application is described in detail in the Scope section of the EPs.

Currently 118 Equator Principles Financial Institutions (EPFIs) in 37 countries have officially adopted the EPs, covering the majority of international project finance debt within developed and emerging markets.

EPFIs commit to implementing the EPs in their internal environmental and social policies, procedures and standards for financing projects and will not provide Project Finance or Project-Related Corporate Loans to projects where the client will not, or is unable to, comply with the EPs.

While the EPs are not intended to be applied retroactively, EPFIs apply them to the expansion or upgrade of an existing project where changes in scale or scope may create significant environmental and social risks and impacts, or significantly change the nature or degree of an existing impact.

The EPs have greatly increased the attention and focus on social/community standards and responsibility, including robust standards for indigenous peoples, labour standards, and consultation with locally affected communities within the Project Finance market. They have also promoted convergence around common environmental and social standards. Multilateral development banks, including the  European Bank for Reconstruction & Development, and export credit agencies through the OECD Common Approaches are increasingly drawing on the same standards as the EPs.

The EPs have also helped spur the development of other responsible environmental and social management practices in the financial sector and banking industry and have supported member banks in developing their own Environmental and Social Risk Management Systems.

Equator Principles Financial Institutions (EPFIs) apply EPs to new projects (globally and across all industry sectors) financed by five financial products:

• Project Finance Advisory Services,

• Project Finance,

• Project-Related Corporate Loans,

• Bridge Loans,

• Project-Related Refinance, and Project-Related Acquisition Finance.

It is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making.

IFC’s Environmental and Social Performance Standards define IFC clients’ responsibilities for managing their environmental and social risks.​

The 2012 edition of IFC’s Sustainability Framework, which includes the Performance Standards, applies to all investment and advisory clients whose projects go through IFC’s initial credit review process after January 1, 2012.

​GUARD AGAINST UNFORESEEN RISKS AND IMPACTS

Implementing the Performance Standards helps companies identify and guard against interruptions in project execution, legal claims, brand protection, and accessing international markets.

IMPROVE FINANCIAL AND OPERATIONAL PERFORMANCE

IFC believes that meeting the Performance Standards helps clients improve their bottom line. Implementation of the Standards can help optimize the management of inputs such as water and energy, and minimize emissions, effluents, and waste, leading to a more efficient and cost-effective operation.

SOCIAL LICENSE TO OPERATE

In addition, the Standards help clients find ways to maximize local development benefits and encourage the practice of good corporate citizenship. This often results in greater acceptance of the project by local communities and governments, allowing companies to acquire a social license to operate. Enhanced brand value and reputation may also be attractive to new investors or financiers.

GAIN AN INTERNATIONAL STAMP OF APPROVAL

The “Equator Principles,” which have been adopted by more than 70 of the world’s leading investment banks in developed and developing countries, are based on IFC’s Performance Standards. These principles are estimated to cover nearly 90% of project financing in emerging markets.

ISO 14001 sets out the criteria for an environmental management system and can be certified to by organizations that meet the standard’s requirements and successfully undergo an audit process conducted by an accredited certification body. It maps out a framework that a company or organization can follow to set up an effective environmental management system.​

Designed for any type of organization, regardless of its activity or sector, it can provide assurance to company management and employees as well as external stakeholders that environmental impact is being measured and improved.​

The ISO 14000 family of standards are developed by ISO Technical Committee ISO/TC 207 and its various subcommittees. For a full list of published standards in the series see their standards catalogue.

ISO 14001 provides requirements with guidance for use that relate to environmental systems. Other standards in the family focus on specific approaches such as audits, communications, labelling and life cycle analysis, as well as environmental challenges such as climate change.

UNDP’s Social and Environmental Standards (SES) underpin our commitment to mainstream social and environmental sustainability in our Programmes and Projects. The objectives of the standards are to:

• Strengthen the quality of programming by ensuring a principled approach; 

• Maximize social and environmental opportunities and benefits; 

• Avoid adverse impacts to people and the environment; 

• Minimize, mitigate, and manage adverse impacts where avoidance is not possible;

• Strengthen UNDP and partner capacities for managing social and environmental risks; and

• Ensure full and effective stakeholder engagement, including through a mechanism to respond to complaints from project-affected people.

The SES are an integral component of UNDP’s quality assurance and risk management approach to programming. This includes our Social and Environmental Screening Procedure.

The standards are underpinned by an Accountability Mechanism with two key functions:

1. A Stakeholder Response Mechanism (SRM) that ensures individuals, peoples, and communities affected by UNDP projects have access to appropriate procedures for hearing and addressing project-related grievances; and

2. A Compliance Review process to respond to claims that UNDP is not in compliance with UNDP’s social and environmental policies.

Through application of the SES and Accountability Mechanism, UNDP enhances the consistency, transparency and accountability of its decision-making and actions, improves performance, and strengthens achievement of positive development outcomes.