SUSTAINABLE FINANCE PRINCIPLES

Finance is widely seen as an obstacle to a better world. Sustainable Finance Principles outline how the financial sector can use finance as a means to achieve social goals and divert the planet and its economy from its current path to a world that is sustainable for all.

The Sustainable Finance Principles for Tanzania (SFPs) result from preliminary engagement of financial sector actors from Tanzania in 2019 and are intended as a starting point for, adopting and implementing Sustainable Finance Principles (SFPs) across banking and financial institution in Tanzania.
The Principles have been designed to prioritize environmental and social sustainability, which will strengthen and expand business opportunities in Tanzania. The principles have been inspired by a number of national, regional and global initiatives striving to guide financial sector contributions to sustainable development
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Sustainable finance is a business strategy that balances economic, social and environmental issues in business. It integrates social and environmental considerations in lending and refers to a decision by banks to provide products and services to customers who consider socio environmental factors as a way of ensuring the adoption of sustainability principles across the financial sector

Business Case for Sustainability

Sustainability challenges pose numerous business risks that can result in material costs to companies. Continued population growth coupled with climate change challenges are expected to have serious implications on the natural resource base, communities and businesses, which depend on them. The approach of sustainable banking is to help stimulate further economic growth and opportunity as well as enhance innovation and competitiveness, while helping shape Tanzania’s economic, social and environmental development agenda. To fully support this agenda, it is therefore paramount that the private sector take the lead in helping mould Tanzania’s financial landscape via the championing and mainstreaming of the SFPs via private banks.
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Purpose of the Sustainable Finance Principles

Raise financial sector awareness of the environmental and social risks associated to business-as-usual and opportunities linked to embracing sustainable development strategies.

Promote sustainable finance practices by setting the key environmental, social and governance requirements for financial institutions.

Increase transparency and consistency in the implementation of policies and practices for sustainable environmental and social management in the sector’s business activities and operations.

Reinforce and promote client and stakeholder confidence in the financial sector.

Support collaboration between different stakeholders for sustainable development