Online Reporter
Nelson Gahadza
Senior Business Reporter
The Reserve Bank of Zimbabwe (RBZ) says it is undergoing the Sustainability Standards Certification Initiative (SSCI) certification process for central banks to enhance its commitment to sustainable financial practices.
The SSCI is a holistic global framework requiring a business to not only be profitable, but also do business responsibly, caring for people and the planet.
This also aligns with environment, social and governance (ESG) standards and connects directly to the United Nations Sustainable Development Goals (SDGs).
In Zimbabwe, ZB Bank became the first financial institution to receive sustainability certification. With the central bank prioritising these standards, the bank hopes to lead by example and encourage other financial institutions to adopt similar practices.
“As a country, we move together from our central bank; therefore, we are also undergoing the standard because later, after the days when the standards were modified for central banks, we jumped on board,” said RBZ Deputy Governor Dr Jesimen Chipika at a recent ZB media briefing.
“Resultantly, currently the central bank is undergoing SSCI certification for central banks so that we are starting at the highest level where monetary policy is being made.”
She said the certification of the RBZ will set a precedent for financial institutions, as they are the ones that fund the industry.
“The SSCI standards for industry are also now available, and together we will raise our economy to be 20 to 30 times better than we are now,” she said.
Dr Chipika noted that sustainability practices would drive financial sector performance and the benefits would accrue to the real economy.
“This initiative aims to integrate environmental, social and governance considerations into the bank’s operations and decision-making processes. As part of this initiative, the RBZ is expected to implement various policies that promote sustainable investment and support green projects within the country,” she said.
Dr Chipika said by recommending the standard to the local financial sector, the central bank was seeking to drive the renewal of the sector because it was prone to a number of threats.
“In this renewal process, we are building strong financial institutions that are profitable because the standards are so rigorous to ensure banks generate a higher profit,” she said.
She added that the standard was built on resilient financial institutions to avoid scenarios in which banks go under due to different factors.
Dr Chipika noted that more banking institutions were expected to be SSCI-certified in the very near future, as already 15 large banks had enrolled in the SSCI.
“We want the whole financial sector to be moving together to bring up the country,” she said. “In addition, we have three smaller ones, bringing that to a total of 18 institutions, which is more than 90 percent of the banking sector engaged in the process to get SSCI-certified.”
Economist Mr Walter Mapfumo said the collaborative effort between RBZ and banks was expected to enhance the overall stability and credibility of the financial system.
“With such a significant percentage of banks participating, the initiative could serve as a model for other sectors aiming for similar certifications,” he said.
“This could pave the way for innovative practices and regulatory frameworks that bolster investor confidence.”
Furthermore, Mr Mapfumo said setting a precedent in the banking industry may encourage cross-sector partnerships that focus on sustainability and accountability.
“So far, out of our 19 big banks in the country, 15 of them are already enrolled in the SSCI,” he said.
