BSP Issues Guidelines For Sustainable Investments By Banks

The Bangko Sentral ng Pilipinas ("BSP"; the Philippine Central Bank) issued BSP Circular No. 1149, series of 2022 (Guidelines on the Integration of Sustainability Principles in Investment Activities of Banks). The Circular sets expectations on the prudent conduct of investment activities, as well as minimum practices that banks must establish for the management and control of investment-related risks. It amends Section 614 of the Manual of Regulations for Banks regarding the investment activities of BSP-supervised financial institutions, and embeds sustainability-related requirements therein.

Salient amendments include the following:

• Board and senior management oversight. A bank's board of directors must oversee the integration of sustainability principles and objectives in the bank's investment activities and monitor the bank's progress in attaining such objectives. Meanwhile, portfolio objectives developed by senior management pursuant to board-approved