The Deputy Governor of the Bank of Uganda, Martin Atingi-Ego, has officially launched the Environmental, Social, and Governance (ESG) framework for the banking and financial sector in Uganda.
Atingi-Ego emphasized the significance of the ESG framework, highlighting that it aligns with evolving market expectations, regulatory scrutiny, and changing global needs by addressing associated risks and impacts.
“The ESG Framework for the banking industry comprises guidelines and principles designed to help member financial institutions of the Uganda Bankers’ Association (UBA) achieve their sustainability goals. It will aid their clients in transitioning towards low-carbon and resource-efficient economies while also promoting financial inclusivity and social welfare,” stated Atingi-Ego during the launch event in Kampala.
He added that the framework aims to guide UBA members in systematically managing opportunities and risks related to environmental, social, and governance criteria, in accordance with regulatory guidelines such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), International Sustainability Standards Board (ISSB), International Capital Markets Association, Green Bond Principles, and Social Bond Principles (SBP).
Through this framework, the UBA seeks to support Uganda’s sustainable goals, promote sustainability practices within the banking sector, and facilitate the adoption of sustainability objectives among its member institutions by integrating ESG considerations into their operations and policies.
The framework also aims to provide and communicate a strategic ESG approach that combines global best practices tailored to the Ugandan context.
Wilbrod Owor, Executive Director of the Uganda Bankers Association, noted that the framework’s key pillars include ESG Governance, which involves understanding its capabilities and opportunities at all levels of UBA member institutions, from the board level to management, training needs, IT, and officer levels.
“Another pillar is Sustainable Finance, which offers guidance on developing a sustainable finance framework for green, social, and sustainable bonds. This covers four core components: the process of project evaluation and selection, use of proceeds, management of proceeds, and reporting,” Owor explained.
Additional pillars include ESG Risk Management and ESG Reporting and Disclosures, which provide guidance on identifying and managing potential sources of ESG and climate-related risks, their direct and indirect impacts on other risk types over the short, medium, and long term, and reporting the identified ESG metrics from the comprehensive ESG framework.
Owor mentioned that the framework’s implementation will span 36 months in two phases.
“Phase 1 will focus on communicating and engaging bank staff within member institutions to improve understanding and awareness of ESG from the board level down to the officer level. The Uganda Institute of Banking and Financial Services will support this effort.
“An industry communication and engagement plan has been developed to facilitate internal support among staff at both headquarters and branches, ultimately enabling external communication and support to bank customers in Phase 2,” Owor said.
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