Background
Facilitating access to finance is one of the key goals of global sustainability objectives. The OECD has issued guidances aimed at supporting investors and lenders across the financial sector to have regard to the recommendations of the OECD Guidelines for Multinational Enterprises (the OECD MNE Guidelines). The OECD MNE Guidelines have been developed to provide for responsible business conduct while fostering sustainable finance through specific financial sector guidances.
Why is Responsible Business Conduct (RBC) in the financial sector important?
Promoting RBC standards in the financial sector assists Governments and societies in providing for sustainable global finance. The specific nature of the financial sector characterised by extensive legislative and regulatory requirements including complex customer relationships can lead to practical challenges at various levels. For instance due diligence requirements require comprehensive compliance checks for financial transactions on a regular basis. The guidances developed by OECD make provision for a range of mechanisms intended to give effect to the provisions of the OECD MNE Guidelines while covering a wide range of aspects that are dealt with in financial ecosystems.
How are the guidances applied in practice?
To better understand current policies and practices in this field, the OECD has issued a series of guidances intended to demonstrate how RBC due diligence standards and related practices are integrated in regulatory frameworks. Guidances issued by the OECD which are relevant for the financial sector include Managing Climate Risks and Impact Through Due Diligence for Responsible Business Conduct, Responsible business conduct for institutional investors- Key considerations for due diligence under the OECD Guidelines for Multinational Enterprises, Due Diligence for Responsible Corporate Lending and Securities Underwriting- Key considerations for banks implementing the OECD Guidelines for Multinational Enterprises and Responsible business conduct due diligence for project and asset finance transactions.
Case studies have shown that financial institutions have implemented those practices through mechanisms such as Environmental, Social, Governance (ESG) tools across their operations involving investors and lenders based on the above guidances.
How can the National Contact Point Mauritius support these developments?
The setting up of a National Contact Point (NCP Mauritius) contributes towards the promotion of RBC practices against the backdrop of developments associated with climate change and sustainable finance.
As part of its mandate, NCP Mauritius is responsible for promoting the OECD MNE Guidelines. Should you have any queries on the OECD MNE Guidelines, or the implications, you may contact the NCP Mauritius on secretariat@ncpmauritius.mu