Navigating Pollution: A Blueprint for the Banking Sector

Humanity is facing a triple planetary crisis of climate change, biodiversity loss and pollution, creating a complex web of challenges that must be addressed in a coordinated manner. This paper serves as a vital primer for banks navigating the landscape of pollution-related challenges and opportunities. It highlights the economic and societal costs of pollution, emphasizing the concept of double materiality – how pollution impacts both society and the environment, as well as poses financial risks to companies and financial institutions. At the same time, supporting companies that implement resource-efficient practices and reduce pollution may help banks enhance their clients’ financial performance while contributing to the global sustainable development goals (SDGs). This approach aligns with the growing trend of sustainable finance, which has the potential to generate superior financial returns.

Providing practical guidance, the paper outlines possible actions for banks under each of the six Principles for Responsible Banking (PRB). It emphasizes the importance of a sector-based approach, focusing on five high-impact sectors: mining, textiles, electronics, pharmaceuticals, and agriculture. For each sector, the paper offers detailed insights into specific impacts, risks, and opportunities, along with tools and resources for tackling pollution.

The strategies presented serve as a starting point for banks to engage in meaningful change, ensuring their contributions to pollution reduction and prevention are impactful and lasting. As the world grapples with environmental challenges, the banking sector’s proactive approach to addressing pollution will be crucial in shaping a sustainable future. UNEP FI and its partners commit to developing more detailed guidance on pollution for banks in 2025, further supporting the the sector’s journey towards responsible banking and positive environmental impact.

Find out more about UNEP FI’s pollution work here and the Principles for Responsible Banking here.