Banking sector to support environmental and social causes

Ulaanbaatar /MONTSAME/ Mongolia’s commercial banks will begin setting criteria for project loans based on their social impact and green development by first half of 2015. Banks will demand certain requirements from industries related to the environment, society, mining, construction, agriculture and manufacturing, to help cultivate a better society, the Golomt bank’s website published Friday. According the new standards, the construction sector, for example, must ensure that at least 20 percent of a project’s overall plan sin corporates green infrastructure, in order to qualify for a bank loan. Because it’s difficult to control implementation, banks will set additional requirements when lending to the customer. By implementing the Mongolian Sustainable Finance Principles, banks will integrate environmental and social considerations into business decisions, promote green initiatives, services and products, as well as consider the environmental and safety (E&S) issues of their own operations. The policy retooling will begin after the first quarter of the year in accordance with the Sustainable Finance Principles developed by the Mongolian Bankers Association (MBA), which has shifted its focus toward investing in the country’s future and fostering green development. The Association is redefining commercial banks as a social role model, rolling out several new initiatives. Banks are to create wheelchair ramps, ATM’s for visually impaired people at headquarters and new branches, and priority service for people with disabilities regardless of a queue’s length. Banks will demand additional social requirements from project employers. For example, project employers must fully pay their employees social security fee in accordance with the law, provide wages not less than the minimum wage, and follow occupational safety and health regulation guidelines. In addition, banks will not provide loans for imported used cars more than 10 years old. The Mongolian Bankers Association in cooperation with the Ministry of Environment and Green Development, the Bank of Mongolia, the International Finance Corporation (IFC) and the Dutch Development Bank (FMO) have organized the "Mongolian Sustainable Finance Forum 2014" under the theme "Sustainable Finance: Creating Sustainable Development through Collaboration" in December last year where the launch of the Mongolian Sustainable Finance Principles was officially announced.