Ghana Sustainable Banking Principles and Sector Guidance Notes
Comprehensive Overview and Review
Background and Purpose
The Sustainable Banking Principles Committee was inaugurated on 20th November 2015 by the Governor of the Bank of Ghana. The initiative was developed to help Ghanaian banks respond to emerging global megatrends including:
- Human security
- Anti-money laundering
- Socially responsible stewardship
- Information communication transparency and disclosure
- Corporate integrity
- Environmental and climate change concerns
The framework was endorsed by the Chief Executive Officers and Managing Directors of Banks in Ghana and represents a collaborative effort between the Bank of Ghana (BoG), Ghana Association of Bankers (GAB) and the Environmental Protection Agency (EPA), now the Environmental Protection Authority (EPA).
The Seven General Principles
The Sustainable Banking Principles consist of seven interconnected imperatives that collectively address both external business activities and internal operations.
| Principle | Focus Area |
| Principle 1 | Environmental and Social Risk Management (ESRM) — Identify, measure, mitigate, and monitor E&S risks in business activities; identify opportunities for environmental and social improvements |
| Principle 2 | Internal ESG in Bank Operations — Promote good environmental, social and governance practices in internal business operations |
| Principle 3 | Corporate Governance and Ethical Standards — Follow good corporate governance and refrain from doing business with unethical entities |
| Principle 4 | Gender Equality — Promote gender equality both with clients and within own operations |
| Principle 5 | Financial Inclusion — Extend banking services to unbanked and underbanked areas |
| Principle 6 | Resource Efficiency, Sustainable Production and Consumption — Encourage awareness and initiatives toward resource efficiency |
| Principle 7 | Reporting — Measure and report on implementation of the Principles |
Five Sector-Specific Guidance Notes
The Principles are applied to five high-risk sectors that constitute significant portfolio exposure:
| Sector | Key Focus Areas |
| Agriculture & Forestry | Biodiversity, deforestation, child/migrant labour, water management, chemical use, soil erosion, land tenure |
| Construction & Real Estate | Occupational health and safety, waste management, community engagement, biodiversity, hazardous materials, fire safety |
| Manufacturing | Occupational health and safety, labour rights, hazardous materials, air emissions, waste management, energy consumption |
| Oil & Gas and Mining | Fire/explosion, soil/water contamination, acid mine drainage, decommissioning, security, community displacement, air emissions |
| Power & Energy | Fire/explosion, air emissions, electrical safety, hazardous materials, habitat loss, electromagnetic fields, cultural heritage |
Key Implementation Framework
For Each Principle, Banks Should:
- Develop Policies — Visibly endorsed by senior leadership
- Establish Procedures — Detailed processes for staff compliance
- Provide Training — Ensure staff understand and can implement requirements
- Require Client Reporting — Via covenants in loan agreements
Four-Step Risk Management Process (Principle 1):
- IDENTIFY → E&S related risk exposures
- ASSESS → Categorize as High, Medium, or Low
- MITIGATE → Develop action plans, restructure transactions, or decline
- MONITOR → Regular review of existing clients’ E&S performance
Reporting Phases
| Phase | Requirement |
| Phase 1 | Qualitative description of plans and actions for implementation |
| Phase 2 | Identification of quantitative baseline data, KPIs, and targets |
| Phase 3 | Demonstration of progress against targets; new targets set over time |
Key National Regulatory References
The document references multiple Ghanaian laws and regulations:
- Environmental Protection Agency Act 1994 (Act 490). Act 490 has since been repealed and replaced by the Environmental Protection Act 2025 (Act 1124)
- Labour Act 2003 (Act 651)
- Children’s Act 1998 (Act 560)
- Minerals and Mining Act 2006 (Act 703)
- Renewable Energy Act 2011 (Act 832)
- Hazardous and Electronic Waste Control and Management Act 2016 (Act 917). This Act has since been repealed by Act 1124.
- Land Use and Spatial Planning Act 2016 (Act 925)
Alignment with International Best Practice
The framework draws upon globally recognized standards:
- Equator Principles
- IFC Performance Standards
- UNEP FI’s Guide to Banking and Sustainability
- UN Global Compact
- UN Women’s Empowerment Principles
- Task Force on Climate-Related Financial Disclosures (TCFD)
- Wolfsberg Standards
Significance
This framework represents Ghana’s commitment to:
- Sustainable Development Goals (SDGs)
- Paris Climate Agreement
- Transition to a green economy
- Reducing economic imbalance and social inequality
- Mitigating environmental pollution and climate change effects
The document emphasizes that sustainable banking is not just about risk management but also about identifying opportunities—financing projects that promote sustainable practices can lead to improved client profitability, stronger communities and enhanced bank reputation.
Detailed Principle Descriptions
Principle 1: Environmental and Social Risk Management (ESRM)
This foundational principle recognizes that banks are exposed to E&S risks through their clients’ activities. When a client engages in poor environmental practices—resulting in regulatory fines, cleanup costs, or reputational damage—the bank faces corresponding credit risk, legal risk, and reputational risk. Conversely, financing clients with strong E&S performance creates opportunities for long-term, stable returns.
The principle applies to corporate lending, SME lending, project finance, leasing, and equity investments. Banks are encouraged to develop sector-specific risk identification tools and maintain “exclusions lists” for activities posing unacceptable E&S risks.
Principle 2: Internal ESG in Bank Operations
Banks must practice what they preach. This principle addresses the bank’s own carbon footprint, resource use, and employment practices. Benefits include reduced operational costs, avoidance of regulatory fines, improved reputation and enhanced workforce productivity and retention.
Key Performance Indicators include electricity consumption per employee, paper consumption, water consumption, GHG emissions, waste production, employee health and safety incidents, sick days, training hours, workplace diversity and community engagement.
Principle 3: Corporate Governance and Ethical Standards
This principle addresses reputational, legal, and credit risks arising from poor governance in both the bank and its clients. Unacceptable behaviours include bribery, illegal activities, aggressive tax avoidance, unethical procurement and failure to follow regulations.
For business activities with clients, banks must develop policies defining unacceptable client behaviors, enhanced screening and monitoring procedures, training on recognizing governance failures, and organizational structures ensuring accountability. For internal operations, banks must establish board-endorsed governance policies, zero-tolerance approaches, whistleblowing mechanisms and regular training.
Principle 4: Gender Equality
With women comprising 51% of Ghana’s population, gender equality represents both a moral imperative and a commercial opportunity. Studies in Ghana show men are two to three times more likely to access credit or reach senior management positions than women.
The framework adapts the UN Women’s Empowerment Principles into seven actionable practices: establish high-level corporate leadership, treat all fairly at work, ensure health and safety, promote professional development, implement enterprise development practices that empower women, promote equality through community initiatives, and measure and publicly report progress.
Principle 5: Financial Inclusion
Ghana has made significant strides in financial inclusion—exclusion dropped from 44% in 2009 to 25% in 2015, driven largely by mobile money innovation. However, women, youth and rural populations remain disproportionately excluded
Implementation requires understanding barriers to access (physical distance, minimum requirements, lack of credit history, low financial literacy) and removing them through branch expansion, technology platforms, basic accounts, credit-building services, financial literacy coaching and school programs.
Principle 6: Resource Efficiency and Sustainable Production
Natural resources are finite, and their inefficient use threatens both environmental sustainability and economic growth. Resource efficiency initiatives can improve client profitability—reducing energy bills, converting waste to revenue through industrial symbiosis and enhancing brand strength.
Product innovations include advisory services, preferred interest rates for green investments, resource efficiency-themed savings accounts, industrial symbiosis financing and sustainable energy project finance.
Principle 7: Reporting
Transparent reporting drives performance improvement and demonstrates commitment. The Bank of Ghana implements a phased approach: Phase 1 (qualitative descriptions), Phase 2 (quantitative baselines and KPIs) and Phase 3 (progress demonstration and new targets).
The Bank of Ghana collates reports and provides private feedback to individual banks on their relative progress, with potential for future award schemes recognizing strong performance.
Sector-Specific Guidance Details
Agriculture & Forestry
Agriculture accounts for approximately 36% of Ghana’s employment. Ghana is the world’s second-largest cocoa producer. However, forest cover declined from 32.7% to 21.7% of land area between 1990 and 2010, with over 80% of agricultural expansion contributing to deforestation.
Critical risk management practices include pre-conversion biodiversity surveys, integrated pest and nutrient management, buffer zones around sensitive habitats, fire risk monitoring systems, compliance with ILO conventions and the Labour Act 2003, thorough land acquisition due diligence and community engagement plans with accessible grievance mechanisms.
Sector opportunities include irrigation upgrades, solar-powered pumps, drone technology for precision agriculture, organic farming premiums, REDD+ carbon payments, bioenergy from agricultural waste and out-grower schemes creating shared value.
Construction & Real Estate
Ghana’s construction industry has grown 70% since 2010, driven by infrastructure demand, oil discovery and urbanization. The country faces a housing deficit exceeding 1.7 million homes, with particular scarcity of low-income affordable units.
Critical risk management practices include OHSAS 18001/ISO 45001 certified health and safety systems, fall prevention infrastructure, waste management plans, pre-construction biodiversity surveys, fire risk assessments, ILO-compliant labour standards, dust suppression, sediment control, noise monitoring, traffic management plans, and cultural heritage surveys.
Sector opportunities include green building certifications, energy-efficient design, renewable energy integration, sustainable materials sourcing, community infrastructure investment, affordable housing development and public-private partnerships.
Manufacturing
Manufacturing subsectors include agro-processing, cement, breweries, mineral ore processing, textiles, chemicals, pharmaceuticals and wood/metal products. The EPA’s Akoben Programme rates manufacturing environmental performance publicly on a five-point scale.
Critical risk management practices include certified health and safety management systems, chemical risk assessments (COSHH methodology), air emissions monitoring, waste management plans, energy efficiency audits, fire emergency plans approved by Ghana National Fire Service and wastewater pre-treatment before discharge.
Sector opportunities include energy-efficient machinery upgrades, renewable energy installations, innovative sustainable product lines, biodegradable packaging, and local community small business investment.
Oil & Gas, and Mining
Ghana’s oil and gas industry encompasses upstream offshore drilling (Jubilee Field, Deepwater Tano, West Cape Three Points), midstream processing, and downstream refining at the Tema Oil Refinery. The mining sector—dominated by gold—contributes 4.2% of GDP and 37% of total exports. Ghana is Africa’s largest gold producer after South Africa.
Critical risk management practices include facility design to ISO 13702:2015 standards, Oil Spill Response Plans, tailings dam integrity monitoring, acid base accounting, closure and decommissioning plans with secured funding, NORM management procedures, security aligned with Voluntary Principles on Security and Human Rights, community resettlement action plans and flaring minimization.
Sector opportunities include natural gas capture and sale, drilling fluid recycling, water recycling facilities, virtual reality safety training, drone asset inspection, renewable energy diversification and community development plans aligned with SDGs.
Power & Energy
Ghana’s power sector is unbundled, with 42.7% hydro and 57.1% thermal energy. Solar represents only 0.04% but is growing rapidly. Electricity demand grows at 7% annually, with access reaching approximately 72% of the population.
Critical risk management practices include fire safety standards, vegetation monitoring in transmission corridors, HAZOP assessments, air emissions detection, specialized electrical safety training, PCB transformer replacement, confined space air quality testing, cooling water temperature management, minimum water flow guarantees for hydropower, EMF exposure monitoring and resettlement action plans where communities are displaced.
Sector opportunities include smart technology and solar panel product lines, drone inspection services, renewable energy diversification, LNG terminal development, nuclear power infrastructure preparation and community electrification in remote areas.
Conclusion
The Ghana Sustainable Banking Principles and Sector Guidance Notes represent a sophisticated, contextually adapted framework for embedding sustainability into financial decision-making. By addressing both universal principles and sector-specific risks, the framework provides practical guidance while maintaining sufficient flexibility for diverse bank sizes and capabilities.
The initiative’s success will depend on three critical factors: genuine senior leadership commitment, systematic capacity building, and evolution from voluntary adoption to robust oversight mechanisms. As Ghana continues its trajectory toward middle-income status, the banking sector’s role in directing capital toward sustainable, inclusive and resilient economic activities will prove increasingly consequential.
The framework ultimately embodies a recognition that in an era of climate change, resource scarcity, and rising inequality, the distinction between “sustainable” and “conventional” banking is artificial. All banking must become sustainable banking if the financial sector is to fulfill its purpose of serving society’s long-term needs while safeguarding the interests of future generations.
This review is based on the Bank of Ghana’s “Guidance Notes for the Sustainable Banking Principles” (November 2019), developed in collaboration with the Ghana Association of Bankers, the Environmental Protection Agency (now Environmental Protection Authority) and PricewaterhouseCoopers.