Values-based banks are accountable at all levels of the business model. Transparency enables outsiders to easily understand how a bank is behaving.
First exercise in reporting the greenhouse gas emissions in the Agro sector
Banco Popular de Honduras has set their mission in supporting small, medium and family-run enterprises in the hope of boosting the countries’ economy and reducing poverty. Concerned about the environmental issues, Banco Popular signed in 2019 the Climate Change Commitment, an initiative by the GABV and its members to voluntarily measure and report the greenhouse gas (GHG) footprint of their loans and investment portfolios within a period of three years. As an example of “transparency”, the bank has been the first GABV member in Latin America and the first bank in Honduras to apply the PCAF Standard to measure the GHG emissions in the Agro sector.
As a frontier of ethical banking, the bank has applied for the first time the PCAF Partnership for Carbon Accounting Financials (PCAF) methodology in the Agro sector, a key lending sector for the bank, especially to small and medium size businesses. This exercise facilitates the construction of a reference baseline of GHG emissions from the financial industry in the microfinance sector in the region.
The calculation result in this first emissions report showed that the bank is responsible for 0.02 tons of CO2e per customer in the Agro sector. If applied to the entire loan portfolio, it would mean that the bank is financing 315.96 tons of CO2e as absolute emissions in the segment of the agricultural sector annually.
Although this measurement is focused on a part of their lending portfolio of the Agro business, as well as the sample size was only constituted of 315 clients at the national level belonging to the agriculture, livestock and agricultural trade sectors, it is encouraging to see this courageous intention – when a value compounds with a right tool, it is possible to trace the sector and approach to a figure that can be transparently reported.
Iris Amador, Social Performance Officer of Banco Popular de Honduras says: “Upon being conscious of the negative effects of climate change in our country, Banco Popular tries to understand and take action to measure the impact of our customers’ operations. In this way, we address the search for solutions that allow us to repay or compensate for the caused damage; also we inform, communicate and educate our users, customers and communities.”