The NGO Forum on Cambodia (NGOF) as a member of Fair Finance Cambodia coalition (FFC) had worked with its members to organize a consultative workshop to share and discuss about Environmental, Social, and Governance compliance (ESG) in banking and financial sectors in Cambodia. The workshop was held during half-day on the 23rd September 2022 in Sunway Hotel, Phnom Penh.
The objectives of the workshop are:
• To identify finance and bank challenges and good points of using EIA legal tools such as EIA, EIA sub-decree from MoE to hold their business clients to be accountable for sustainable ESG practices in Cambodia.
• To identify policy gaps of both selected banks and MoE in promoting best practices of ESG compliance and propose alternative policies and practices to MoE and banks to ensure sustainable ESG compliance in Cambodia focusing on policy gaps of Financial Institution (FI) comparing with the requirements of Environmental Impact Assessment (Sub-Decree No. 72).
On behalf of Dr. Tek Vannara, Executive Director of the NGOF, he thanked and welcomed all the participants for their efforts and time to attend the workshop. Mr. MAR Sophal, said that as members of the group of the Fair Finance Cambodia coalition (FFC), created in 2019, consisting of 8 countries, 6 NGOs (e.g. NGOF, Oxfam, TIC, CCC, SYLAKA, etc.) in Cambodia led by Oxfam, the FFC Mission is working on Financing with National Bank of Cambodia (NBC) for inclusive, transparent, and accountable developments. He informed the participants that the team had done good job with good results in the past years and will continue to perform better achievements. He announced that the participants will see details of discussion results summarized by fellow speaker following his key note remarks. He further informed the meeting that the discussion results were made during last meeting in Tonle Bassac II. In brief, there are 15 Bank representatives, 19 people participated in the meeting, he stressed. He further informed the participants that there is a case study on ESC in 2020 and one more study will be conducted in the end of this year or at the beginning of 2023. He further noted that inputs from the group discussions and individual comments of the today will be incorporated to the report and submitted to relevant responsible ministries for further actions. Therefore, he encouraged all the participants to active participate and pro-actively provide comments and suggestions.
Mr. Sok Khim, Operation Manager of Oxfam in Cambodia, underlined that SDG and FFC are among the most important sectors in economic developments. We have been discussed on financial policies with NBC, and banks on Policies and Guidelines on how to make financial sector works inclusively and transparently. He noted that the Sustainable Finance Guideline is available on Page of FFC. In addition, he added, the ASEAN Guidelines on FFC, being as Taxonomy of FFC for member states to take it into consideration in each country. He emphasized that for society, financing is to provide capital to investors, who produce commodities for consumers. More and more consumers have realized on environment and food security. For instance, European markets. At the same time Cambodian consumers are willing to pay more on commodities for their food security, he stated. Government policies have, also, taken firmed enforcement of the commodities aspects. In addition, banks of the ASEAN regions take consideration of transparent and environment friendly financing in recent time, he added. In Cambodia, as the subject background mentions that the Ministry of Environment (MoE) has been implementing Environmental and Social Impact Assessment (ESIA). Most Banks have Memorandum of Understanding (MoU) with the MoE on their loans considering ESIA into their investment loans. Then, he raised the inquiry whether what challenges, suggestions, and recommendations from the participants of the workshop. Last, he stressed that the challenges are to be with the NBC, who is responsible for enforcement of the guidelines, to improve the policies.
The ESG is inclusive, he stated. Mr. Tong Soprach urged that the Banks should have their internal ESG guidelines for borrowers to apply the ESG policies for Sustainable Development. He was detailing on Environmental, Social, and Governance Disclosure for the benefits and sustainable developments, specifically to the bank sector, which provides loans. The important text of the ESG is quoted as:
ESG Disclosure is the practice of measuring, disclosing and being accountable to internal and external stakeholders for organizational performance against specific WSG goals and metrics that support sustainable development, incorporating sustainability into the company’s overall strategy and policies.
Having taken the floor, Mr. Sovanneath Independent Consultant, briefly raised the main subjects for discussion. They are:
• Banks & Financial Investment (FIs)
• FFC representative
• Other CSOs, academia, and researchers
Questionnaires sheets were distributed for quick written answers. He briefly went through the Questionnaires sheets for explanation and any clarifications. The list of the Questionnaires is attached to the Agenda (Annex 1)
Mr. Chansen Sovanneath was responsible for all facilitation, collection of inputs from the meeting, and consolidation the inputs for the workshop report.