By Kimberly Erriah-Ali – Group General Counsel and Corporate Secretary, Republic Financial Holdings Limited (RFHL)
With the worldwide pandemic gradually settling, carbon emissions are again growing, and sustainability is becoming a global priority. The pressures posed by global warming and climate change remain high on the agendas of major global players, such as the United States, China and the United Kingdom, but this does not mean that those in the emerging markets have placed a lower priority on reducing carbon emissions and meeting objectives
Indeed, the harsh reality of climate change is clear, and the time for action is now. In April this year, Republic Financial Holdings Limited (RFHL) took a leadership role in the Caribbean in working towards creating a greener and more sustainable region as a founding signatory member of the United Nations (UN)-convened, Net-Zero Banking Alliance (NZBA). This global initiative places climate finance at the forefront of the fight against the current climate crisis.
The Alliance was preceded by the United Nations Principles for Responsible Banking – a single framework for a sustainable banking industry, developed through a partnership with banks worldwide and the United Nations Environment Programme Finance Initiative (UNEP FI), which was signed in October last year.
As a Caribbean organisation, RFHL firmly believes in investing in tomorrow and by doing so, we help to facilitate the transition to a more resilient society. To put it more bluntly, it doesn’t take a climate or agricultural expert to understand what climate change and extreme weather conditions can mean for the Caribbean’s breadbasket.
According to the International Finance Corporation (IFC), global climate investment opportunities will total $23trillion by 2030; RFHL’s potential share is $200million, and we’re aiming to scale up green finance and develop recommendations on how to further prevent climate change while creating environmental solutions in collaboration with our clients by 2025.
Our goal is to increase the proportion of (a) electric and hybrid car loans in our car loan portfolio, (b) loans related to clean fuels, renewable energy use, and technology, (c) loans that contribute to energy efficiency improvements, and (e) new construction loans that use climate-resilient technology.
“As a Caribbean organisation, RFHL firmly believes in investing in tomorrow and by doing so, we help to facilitate the transition to a more resilient society”
By directing capital toward environmental, renewable energy, green initiatives, blue economy and socially focussed projects, the proposed $200million commitment aligns with our optimal risk appetite. As a result, we continue to monitor stress-testing results to see if any identified climate-related risks have an impact on our capital/liquidity. We intend to provide comprehensive climate risk training to all impacted teams as we develop our policy suite in line with our climate risk management strategy, which will go a long way toward achieving net-zero banking in our own operations.
Given the negative effects of climate change on the Caribbean and our reliance on fossil fuels, RFHL has prioritised energy and climate goals (the United Nations Sustainable Development Goals7 and 13). We believe that making a financing commitment or lending goal across the Group is the most direct, impactful, and measurable contribution we can make.
This single commitment will serve to unite all of the Group’s initiatives involving either energy or climate goals. Admittedly, these are tentative first steps. However, when looking at the overarching policy aim of the Caribbean with respect to carbon neutrality, it is imperative that RFHL begins acting now.
The importance of minimising risks as much as possible is a critical component for us. In order to manage climate risk, societies like ours have developed an understanding of the environment’s volatility over time. People have learned to adapt their behaviour and way of life in order to mitigate the negative effects of climate change while also taking advantage of their local climatic conditions. We want to be at the forefront of that conversation.
While the Caribbean and its financial sector are only at the start of a long journey, RFHL’s commitment to global sustainability networks, the government’s determination to meet our climate goals, and our strategic location within the region have given us the impetus we need to truly establish the Group as an emerging market leader in the green sector.
RFHL has taken the bold step of advancing the fight against climate change to help secure the future of the planet and the generations to come.
About the Author:
Kimberly Erriah-Ali is an Attorney-at-Law with 23 years of experience; having received her Bachelor of Laws with Honours from the University of the West Indies, and her Legal Education Certificate from the Hugh Wooding Law School, Trinidad. She has established the Group’s Compliance Department and she is currently a Director on the Board of Republic Wealth Management Limited, Republic Trustee Services Limited and other offshore subsidiaries of Republic Bank. Kimberly also holds an external directorship on the Board of a Telecommunications provider in Trinidad and Tobago. She brings to bear a wide range of expertise in Corporate and Commercial Law, Conveyancing, Trusts, Landlord and Tenant Law, Intellectual Property, Estates and Litigation.
About The Company:
Republic Financial Holdings Limited (RFHL) is the registered owner of all of the Banks in the Republic Group – Republic Bank Limited, Republic Bank (Guyana) Limited, Republic Bank (Barbados) Limited, Republic Bank (Grenada) Limited, Republic Bank (St Maarten) N.V., Republic Bank (EC) Limited, Republic Bank ( Anguilla) Limited, Republic Bank (Suriname) N.V, Republic Bank (Cayman) Limited, Republic Bank (Ghana) Plc., Republic Bank (BVI), Cayman National Corporation as well as Republic Wealth Management Limited and other subsidiaries. In keeping with international best practice, this holding company was formed with the aim of offering increased operational efficiencies and optimum management of the Group; ultimately leading to greater value for our shareholders and clients while enabling greater strategic focus and diversification.