Banking and Finance
Value Ecosystem

GABV event: #BankingOnValues comes to Melbourne (Full Version)

Burgess COMMENTARY

Peter Burgess

About

The Global Alliance for Banking on Values (GABV) is a network of banking leaders from around the world committed to advancing positive change in the banking sector. Our collective goal is to change the banking system so that it is more transparent, supports economic, social and environmental sustainability, and is composed of a diverse range of banking institutions serving the real economy. Founded in 2009, we are a growing network, with banks, banking cooperatives and credit unions, microfinance institutions and community development banks joining us from many parts of the world.

Our members have one thing in common: a shared mission to use finance to deliver sustainable economic, social and environmental development, with a focus on helping individuals fulfil their potential and build stronger communities.

Our members are deeply connected to the people and the communities they serve and are accountable for the risks they both take and create for the people who use their products and services. Our focus on inclusion puts basic banking products in service of a greater number of people, rather than highly sophisticated products in the hands of a few. We are also highly aware of the externalities produced by our banking activities by the projects and clients we finance.

The Global Alliance comprises 39 financial institutions* and four strategic partners operating in countries across Asia, Africa, Australia, Latin America, North America and Europe. Collectively we serve more than 24 million customers, hold up to $110 billion USD of combined assets under management, and we are supported by more than 42,000 co-workers.

We want to ensure that banking is a healthy and productive system of society and develop a positive, viable alternative to the current banking system. We know that only by changing finance are we able to finance change. Increasingly, people are becoming aware of the interdependence of the real economy, social cohesion and our natural eco-system, something values-based bankers have long understood, and which is at the heart of the business model. Knowing that people want to support positive change in society, we have an opportunity to demonstrate a healthy transformation of our sector, contribute to societal solutions, and become a reference point for others along the way.

At its heart, the GABV is a Chief Executive Officer network providing a unique space for collaboration for leaders who are committed to values-based banking. It also provides learning and development opportunities for senior executives, experts and banking professionals at member banks through our Communities of Practice (CofP). The GABV takes a leading role in the debate about how to build a sustainable financial future by managing joint projects among members, experts and partners to help deliver it and by advocating for change.

We have a strong belief in the value of our banking model and our recent research backs that up, showing that lending to the real economy delivers better financial returns when compared with the largest banks in the world. We have demonstrated through our focus on the real economy, our strong capital positions, and our steady financial returns that the values-based banking model provides a viable and needed alternative, adding strength to a diverse financial ecosystem.

There is another way to describe our work!

View the video. What is Banking on Values? by Ralph the Kid Banker.

GABV Principles of Sustainable Banking

GABV2020 Strategy (English) (Spanish) GABV Governance GABV Programmes GABV Membership (benefits & criteria) *At the end of 2016

Principles

The GABV Principles of Sustainable Banking describe the fundamental pillars of values-based banking:

Principles

Triple bottom line approach at the heart of the business model
... Grounded in communities, serving the real economy and enabling new business models to meet the needs of both
... Long-term relationships with clients and a direct understanding of their economic activities and the risks involved
... Long-term, self-sustaining, and resilient to outside disruptions
... Transparent and inclusive governance All of these principles embedded in the culture of the bank

More Information

1. Triple bottom line approach at the heart of the business model.

Sustainable banks integrate this approach by focusing simultaneously on people, planet and prosperity. Products and services are designed and developed to meet the needs of people and safeguard the environment; generating reasonable profit is recognized as an essential requirement of sustainable banking but is not a stand-alone objective. Importantly, sustainable banks embrace an intentional approach to triple-bottom-line business – they don’t just avoid doing harm, they actively use finance to do good.

2. Grounded in communities, serving the real economy and enabling new business models to meet the needs of both.

Sustainable banks serve the communities in which they work. They meet the financial needs of these geographic and sector-based communities by financing sustainable enterprise in productive economies.

3. Long-term relationships with clients and a direct understanding of their economic activities and the risks involved.

Sustainable banks establish strong relationships with their clients and are directly involved in understanding and analysing their economic activities and assisting them to become more sustainable themselves. Proper risk analysis is used at product origination so that indirect risk management tools are neither adopted as a substitute for fundamental analysis nor traded for their own sake.

4. Long-term, self-sustaining, and resilient to outside disruptions.

Sustainable banks adopt a long-term perspective to make sure they can maintain their operations and be resilient in the face of external disruptions. At the same time they recognize that no bank, or its clients, is entirely immune to such disruptions.

5. Transparent and inclusive governance.

Sustainable banks maintain a high degree of transparency and inclusiveness in governance and reporting. In this context, inclusiveness means an active relationship with a bank’s extended stakeholder community, and not only its shareholders or management.

6. All of these principles embedded in the culture of the bank.

Sustainable banks seek to embed these principles in the culture of their institutions so that they are routinely used in decision-making at all levels. Recognizing that the process of embedding these values requires deliberate effort, these banks develop human resources policies that reflect their values-based approach (including innovative incentive and evaluation systems for staff), and develop stakeholder-oriented practices to encourage sustainable business models. These banks also have specific reporting frameworks to demonstrate their financial and non- financial impact. Share 

The Global Alliance for Banking on Values in a nutshell. A short film showing why the network was founded, what it is, and why its impact on people’s lives across the world is so important. Produced by Bankmecu for the 2014 annual meeting in Melbourne.

GABV event: #BankingOnValues comes to Melbourne (Full Version)

https://youtu.be/uWIfz93MW44