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Ulaanbaatar, Mongolia, Dec 16, 2014
– The Mongolian Bankers Association (MBA), the Ministry of Environment, Green Development and Tourism, the Bank of Mongolia, IFC (a member of the World Bank Group), and Dutch Development Bank FMO today launched the Mongolian Sustainable Finance Principles and Sector Guidelines, a voluntary framework to help local banks integrate environmental and social considerations into lending decisions and product design, promoting sustainable development in the resource-rich country.
The new guidelines, which will take effect in January, were introduced to the public at the Mongolia Sustainable Finance Forum 2014 today. The guidelines cover four key industries: mining, agriculture, construction, and manufacturing. By implementing these practices, banks will reduce the risk of loan defaults and identify new business opportunities, such as in renewable energy and clean technologies.
“Sustainable finance presents a new economic model, one in which growth no longer comes at the expenses of communities and the environment, but instead contributes to a thriving green economy,”
said Oyunkhorol Dulamsuren, Minister of Environment, Green Development and Tourism.
“We are keen to support initiatives like this to promote long-term and inclusive growth in Mongolia.”
The newly launched principles are based on international benchmarks, particularly the IFC Performance Standards, the World Bank Group Environmental, Health, and Safety Guidelines, and the Equator Principles, a private sector-led credit risk management framework for determining, assessing, and managing environmental and social risk in project-finance transactions.
As one of the fastest growing economies in the world, Mongolia relies on industries – mining, livestock, and real estate development – that can contribute to pollution or water scarcity, making banking practices that take environmental and social considerations into account all the more necessary.
“Sustainable banking practices protects bank assets and create business opportunities by opening new markets and products,”
said Naidalaa Badrakh, CEO of MBA
. “To help banks adopt such practices, we are keen to promote knowledge sharing and productive dialogue among stakeholders, building sector capacity and a level-playing field.”
In 2013, several CEOs of major Mongolian banks gathered at the first Mongolia Sustainable Finance Forum and agreed to create a working group, convened by MBA and supported by regulators, to develop a framework to address Mongolia’s environmental and social issues through lending.
“The positive link between environmental and social standards and improved commercial performance is firmly established and has opened up new lending and investment opportunities in many countries”,
said Vivek Pathak, IFC’s Director for Asia and the Pacific
. “We are committed to facilitating the implementation of Mongolia’s sustainable finance agenda with our global expertise and local knowledge.”
IFC plans to launch a Training of Trainers program next year to build industry capacity and improve Mongolian banks’ performance in environmental and social risk management.
“Mongolia’s sustainable finance journey is clearly an inspiration, one that has been defined by strong local ownership, joint commitment and strategic partnership. The banking sector has demonstrated within a short timeframe that it is possible to chart a common course for a green economy”,
said Jaap Reinking, FMO’s Director for Financial Institutions.
“As we applaud today’s achievement, we recognize that the implementation of the Principles will demand the same degree of collective will we have witnessed till date. FMO will continue to support on-going efforts of the industry in promoting sustainable finance practices.
An increasing number of emerging markets are adopting sustainable banking practices, including China, Bangladesh, Brazil, Nigeria and Indonesia, in a combination of regulatory guidance and industry-led voluntary initiatives similar to that of Mongolia.
The Sustainable Banking Network was launched in 2012 with Mongolia as a founding member and today includes 14 countries. Through this IFC-facilitated network, regulators and banking associations can share knowledge and resources to develop environmental and social best practices in their countries’ financial markets.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit
FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of EUR 6.3 billion, FMO is one of the largest European bilateral private sector development banks. For more information, visit
The Mongolian Bankers Association is an independent, non-profit, non-government organization established in 2000 by the banking and non-banking financial institutions in Mongolia. As of today, we are the voice for 22 member financial institutions including 13 commercial banks, the Development Bank of Mongolia, 3 foreign Bank Representative Offices and non-bank financial institutions.The Vision of the MBA is to become a powerful professional organization representing the bankers and financial officers, to lead the banking and financial sector to ensure the sustainable development and equitable economic growth of Mongolia, and to contribute substantially to the development of the country as the regional financial center. For more information, visit
About Ministry of Environment, Green Development and Tourism
The Mission of the MEGDT is “To ensure human rights live in healthy and sound environment by promoting social and economic development taking into consideration of ecological balance, promoting the sustainable use of natural resources, and facilitating the natural rehabilitation and restoration of environmental degradation to support green development, and to develop cooperation and participation of the Government, citizens, private entities and organizations on supporting sustainable development.”
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About Bank of Mongolia
As the Central Bank, the Bank of Mongolia (BoM) ensures the stability of the national currency – Togrog. Within this main objective, the BoM promotes balanced and sustained development of the national economy, through maintaining the stability of money, financial markets, and the banking system. In order to implement its objectives, the BoM conducts activities such as issuing currencies in circulation, formulation and implementation of monetary policy, acting as the Government’s fiscal intermediary, supervision of banking activities, organization of inter-bank payments and settlements, management of the official foreign exchange reserves.
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