SBFN Member Since:
2012
Member Organisations
Bank of Mongolia
Mongolia Bankers Association
Mongolia Ministry of Environment and Green Development
Progress Against Pillars and Sub Pillars
This graphic can also be found within this country’s 2019 Country Progress Report.
Framework Documents
| Country | Policies/ Principles/ Guidelines | Year | Issuer |
|---|---|---|---|
| Mongolia | 2016 | Financial Regulatory Commission (FRC) | |
| Mongolia | 2021 | Bank of Mongolia | |
| Mongolia | 2019 | Mongolian Bankers Association | |
| Mongolia | 2020 | Mongolian Bankers Association | |
| Mongolia | 2019 | Financial Stability Commission of Mongolia | |
| Mongolia | 2020 | Bank of Mongolia | |
| Mongolia | 2018 | Mongolian Sustainable Finance Association (MSFA) | |
| Mongolia | 2018 | Mongolian Sustainable Finance Association (MSFA) | |
| Mongolia | Sustainable Finance Principles – Manufacturing Sector Guideline | 2014 | Mongolian Sustainable Finance Association (MSFA) |
| Mongolia | Sustainable Finance Principles – Construction and Infrastructure Sector Guideline | 2014 | Mongolian Sustainable Finance Association (MSFA) |
| Mongolia | Sustainable Finance Principles – Agriculture Sector Guideline | 2014 | Mongolian Sustainable Finance Association (MSFA) |
| Mongolia | 2014 | Mongolian Sustainable Finance Association (MSFA) |
Strategic Development - Alignment with global E&S standards and best market practices
S1.1 – Does the framework make reference to international E&S targets (SDGs, Paris Agreement, Global Compact)?
Yes
(1) – Principle 1-8
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Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
S1.2 – Does the framework make reference to established international E&S risk management standards (IFC PSs, EPs)?
Yes
(1) – Principle 1 – Relevant international standards – p.7
– IFC Performance Standards 1 (Assessment of Environmental and Social Risks and Impacts), 3 (Resource Efficiency and Pollution Prevention), and 6 (Biodiversity Conservation and Sustainable Management of Living Resources) (Link) – IFC Environmental, Health and Safety Guidelines (Sector-specific) (Link) – Equator Principles (Link) – EBRD Performance Requirements (Link) – ISO 14001 – Environmental Management (provides practical tools for companies and organisations looking to identify and control their environmental impact and improve their environmental performance.) (Link)
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
S1.3 – Does the framework make reference to established international sustainability reporting standards (GRI, SASB)?
Yes
(1) – Principle 7 – Relevant international standards – p.23
– GRI Guidelines for the Financial Sector highlights best practice reporting for sustainability issues specifically for a Bank’s Business Activities. (Link) – GRI International Reporting Guidelines, G4 is the latest version of internationally accepted best practice in sustainability reporting. A number of different sector supplements can be useful in assessing client transparency and accountability progress. (Link)
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
S1.4 – Does the framework make reference to established international climate finance reporting standards (TCFD)?
No
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S1.5 – Does the framework ask to make E&S policies, practices and results externally verified (assurance, independent review)?
Yes
(1) – Principle 6 – Demonstrating process – p.23
In order to demonstrate progress in implementing this principle, a Bank should: • Develop a policy approach on ethical finance and corporate governance which includes: Any performance related incentives, internal and external audit requirements, and governance responsibility and escalation criteria for risk committees.
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
Strategic Development - Multi-stakeholder collaboration
S2.1 – Does the framework involve interagency collaboration between financial supervisors/regulators, industry association, and FIs?
Yes
S2.2 – Does this collaboration also include other public agencies (e.g., environmental agencies, ministries)?
Yes
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S2.3 – Does this collaboration also include representatives of civil society (e.g., NGOs, associations, media)?
Yes
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Strategic Development - Alignment to NDCs and with National or Regional Climate Change Targets
S3.1 – Is the framework aligned with national NDCs or other national and regional policies on climate?
Yes
(1) – Principle 1 – Definition – p.6
Where possible, a Bank will actively support those Business Activities that encourage and support the avoidance, minimisation and mitigation of negative environmental impacts, and application of environmental standards consistent with Mongolian national laws and international conventions/agreements to which Mongolia is a party.
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
S3.2 – Has the SBN member identified the main climate risks (transition/physical) for their local financial sector?
No
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ESG Integration - Governance of E&S
Role of Governing Bodies on E & S
E1.1 – Does the country policy require one of the FI’s governing bodies (e.g., Board of Directors, Executive Committee, Supervisory Board, etc.) to approve an E&S strategy?
Yes
(9) – Policy implementation – p.11 and p.12 and Changes to the Policy – p.16
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E1.2 – Does the policy require management to report on E&S strategy implementation to the governing bodies?
Yes
(1) – Principle 7 – Demonstrating progress – p.24
Providing internal reports to senior and/or strategic decision making bodies within the Bank
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E1.3 – Does the policy require FI operational bodies to report to the governing bodies (or specific Board committee) on implementation of the E&S strategy?
Yes
(9) – Policy implementation – Monitoring and Reporting – p.12
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Environmental and Social Policy Framework Template (MBA/MSFA, 2015)
Organization
E1.4 – Does the framework ask FIs to define E&S roles and responsibilities?
Yes
(9) – Policy implementation – Governance structure – p.13
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Environmental and Social Policy Framework Template (MBA/MSFA, 2015)
E1.5 – Does the framework highlight the E&S roles of front office staff and second lines of defense (e.g. risk officers and/or compliance officers)?
Yes
(9) – Policy implementation – Governance structure – p.14
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Environmental and Social Policy Framework Template (MBA/MSFA, 2015)
E1.6 – Does the framework ask FIs to define E&S competencies for each role?
No
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E&S Risk Management
E&S Policy
E2.1 – Does the framework ask FIs to formalize an E&S or ESG policy?
Yes
(1) – Principle 1 – Demonstrating progress – p.9
In order to demonstrate progress in implementing this principle, a Bank should: • Develop and implement a sustainable finance policy and procedures which provide an overall approach to avoiding, minimising or mitigating damage to the environment
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E2.2 – Does the framework encourage FIs to go beyond E&S requirements of local laws and regulations?
Yes
(1) – All Principles – “Good Practice References”
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Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E2.3 – Does the framework ask FIs to set E&S objectives and targets?
Yes
(1) – Principle 7 – Implementation – p.23
As part of its sustainable finance policy and procedures, a Bank will regularly and frequently monitor and measure performance against each of the Principles and will report progress against targets to its relevant internal and external stakeholders.
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E2.4 -Does the framework ask FIs to publicly disclose their E&S policy and its governance?
Yes
(1) – Principle 7 – Demonstrating progress – p.24
Publicly report on progress, successes and relevant dilemmas in implementing the Sustainable Finance Principles, around relevant themes contained in each principle, such as environmental protection, human and labour rights, cultural heritage, supporting green economy growth, financial inclusion, etc. on an annual basis.
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
Risk Assessment
E2.5 – Does the framework require FIs to carry out appropriate E&S due diligence at transaction level?
Yes
(1) – Principle 1 – Demonstration progress – p.8
Develop and implement a sustainable finance policy and procedures which provide an overall approach to avoiding, minimising or mitigating damage to the environment that includes : Environmental considerations and criteria in due diligence and business decision-making processes for potential clients and transactions;
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E2.6 – Does the framework require FIs to carry out appropriate E&S due diligence at client level?
Yes
(1) – Principle 1 – Demonstration progress – p.8
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Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E2.7 – Does the framework encourage FIs to categorize projects/clients according to their level of E&S risk?
Yes
(1) – Principle 1 – Implementation – p.7
As part of its sustainable finance policy and procedures, a Bank should develop and implement a policy framework that adequately addresses considerations relating to environmental risk issues and/or negative impacts on the environment potentially associated with its transactions and clients.
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E2.8 – For high-risk transactions, does the framework encourage site visits to be organized?
Yes
(2) – p.10; (3) – p.9; (4) – p.9; (5) – p.9
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Mongolian Sustainable Finance Principles – Agriculture Sector Guideline (MBA, 2014) | Mongolian Sustainable Finance Principles – Construction and Infrastructure Sector Guideline (MBA, 2014) | Mongolian Sustainable Finance Principles – Manufacturing Sector | Mongolian Sustainable Finance Principles – Mining Sector Guideline (MBA, 2014)
E2.9 – In case of negative E&S impacts, does the framework invite FIs to engage with clients to implement mitigation measures?
Yes
(1) – Principle 1 – Demonstration progress – p.8
In order to demonstrate progress in implementing this principle, a Bank should: • Develop and implement a sustainable finance policy and procedures which provide an overall approach to avoiding, minimising or mitigating damage to the environment that includes:
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E&S Covenants
E2.10 – Does the framework ask FIs to incorporate E&S covenants and investment conditions into legal agreements with clients?
Yes
(2) – p.9; (3) – p.9; (4) – p.9; (5) – p.10
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Mongolian Sustainable Finance Principles – Agriculture Sector Guideline (MBA, 2014) | Mongolian Sustainable Finance Principles – Construction and Infrastructure Sector Guideline (MBA, 2014) | Mongolian Sustainable Finance Principles – Manufacturing Sector | Mongolian Sustainable Finance Principles – Mining Sector Guideline (MBA, 2014)
Project Supervision & Portfolio Review
E2.11 – Does the framework ask FIs to develop processes to manage E&S risks during supervision?
Yes
(9) – p.12
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Environmental and Social Policy Framework Template (MBA/MSFA, 2015)
E2.12 – Does the framework encourage a periodic review of E&S risks at aggregate portfolio level?
No
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Training
E2.13 – Does the framework ask FIs to develop and maintain E&S capacity through regular training?
Yes
(1) – Principle 1 – Demonstrating progress – p.8
Dedicated resources and training for relevant Bank staff to create awareness about the potential impacts to the environment and natural resources associated with clients’ activities as well as the potential risk to the bank arising from identified potential impacts.
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E2.14 – Does the framework highlight the training of (i) front office staff, (ii) second lines of defense (risk officers and/or compliance officers), and (iii) E&S experts?
Yes
(1) – Principle 8 – Implementation – p.23; Demonstrating progress – p.24; (9) – Policy Implementation/B.Resources and Training – p.12
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Mongolian Sustainable Finance Principle Guidelines (MBA, 2014) | Environmental and Social Policy Framework Template (MBA/MSFA, 2015)
External Communication Mechanism
E2.15 – Does the policy require FIs to establish and maintain an inquiry/complaints/grievance mechanism in relation to E&S or ESG practices?
Yes
(1) – Principle 6 – Implementation of Principle 6 – p.18
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Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E & S Reporting
E2.16 – Does the policy require FIs to report regularly on E&S or ESG performance, including publicly, to investors or to regulators?
Yes
(1) – Principle 7 – Implementation – p.23(1) – Principle 7 – Demonstrating progress – p.24
As part of its sustainable finance policy and procedures, a Bank will regularly and frequently monitor and measure performance against each of the Principles and will report progress against targets to its relevant internal and external stakeholders. Internal reporting mechanisms on the Principles should be consistent with and be integrated into decision-making processes of the Bank. When implementing this Principle, a Bank should: Report on progress against each one of the Sustainable Finance Principles; In order to demonstrate progress in implementing this principle, a Bank should: Publicly report on progress, successes and relevant dilemmas in implementing the Sustainable Finance Principles, around relevant themes contained in each principle, such as environmental protection, human and labour rights, cultural heritage, supporting green economy growth, financial inclusion, etc. on an annual basis.
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E2.17 – Does the policy make E&S or ESG reporting and disclosure more consistent across financial institutions through principles, guidelines, or templates?
Yes
(1) – Principle 7 – Implementation – §2 – p.23
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
E & S Integration - Enforcement
E3.1 – Is the implementation of the framework regularly verified or is information regularly collected from FIs?
Yes
Mongolian Sustainable finance Association Rule – Rights and responsibilities of MSFA member – 4.1.2 – p.4
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E3.2 – Is there any financial and/or non-financial incentive for establishing ESRM systems?
No
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E3.3 – Are there sanctions/penalties/warnings in case of noncompliance with the framework?
No
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Climate and Green Finance - Products and Services
Defining sustainable assets and financial products
C1.1 – Does the framework provide definitions and examples of green assets?
Yes
(1) – Principle 4 – Implementation – p.15(7)
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Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
C1.2 – Does the framework provide a comprehensive taxonomy of green assets?
Yes
(7)
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A proposal of Green Taxonomy Development for Mongolia (MSFA, 2019)
C1.3 – Does the framework provide definitions, examples, or a taxonomy of social and/or sustainable assets?
Yes
(7)(8)
Mail translation by Oyungerel Munkhbat (MSFA)Activities:• Define sustainable and green finance, and develop a set of green taxonomy
A proposal of Green Taxonomy Development for Mongolia (MSFA, 2019) | Central Bank of Mongolia Monetary Policy (2019)
C1.4 – Besides debt products (loans, bonds), does the framework provide definitions and examples of different types of sustainable finance products/services (e.g., saving accounts, means of payment, insurance, private equity, etc.)?
Yes
(1) – Principle 4 – Implementation – p.15
In developing its approach a Bank should consider its core business and existing mix of products and services, as well as new market opportunities to develop appropriate “green” products or services. In addition, specific measures should be taken to educate and support clients to understand the business benefits of “greener” operations. Examples of how a Bank could implement “green” products and services are provided below: – Personal banking – Green credit/debit cards; green savings accounts; green credit schemes; green mortgages; – SME and Corporate Banking – Assigning dedicated amounts of investment capital for green/socially responsible lending; green leasing for corporate real estate, provide consulting services on environmental best practices; – Project finance – Preferentially financing projects that aim to have a positive environmental impact and demonstrate strong capabilities in environmental management; support and develop new finance opportunities for new projects that use advanced and renewable technologies; – Investment Banking – Investment portfolios focused on environmentally and socially responsible clients and projects; reward and financing schemes for the reduction of GHGs or pollutants; issue green bonds.
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
Green Finance Product Guidelines
C1.5 – Does the framework provide guidelines for green loan/green credit or other green financial assets (excluding green bonds)?
Yes
(1) – Principle 4 – p.16
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
C1.6 – Does the framework provide guidelines for issuance of green bonds?
Yes
(1) – Principle 4 – p.16
Investment Banking – Investment portfolios focused on environmentally and socially responsible clients and projects; reward and financing schemes for the reduction of GHGs or pollutants; issue green bonds.
Mongolian Sustainable Finance Principle Guidelines (MBA, 2014)
C1.7 – Does the framework refer to existing standards (e.g., ICMA’s Green Bond Principles or CBI’s Climate Bonds Standard)?
No
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C1.8 – Does the framework recommend external party verification (e.g., second party opinion, assurance, certification)?
No
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Climate and Green Finance - Climate and Green Investment Reporting
Tracking and Disclosure of Climate & Green Finance
C2.1 – Does the framework ask FIs to report on climate/green finance flows (quantitatively or qualitatively)?
Yes
(8)
Mail translation by Oyungerel Munkhbat (MSFA)• Support international green finance flows.
Central Bank of Mongolia Monetary Policy (2019)
C2.2 – Does the framework ask FIs to report on climate risk exposure at portfolio level?
No
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C2.3 – Does the framework encourage FIs to report publicly on their green finance activities (i.e. not only to the regulator)?
Yes
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Climate and Green Finance - Measurement
Calculation of Environmental Benefits
C3.1 – Does the framework ask FIs to calculate the environmental benefits of their investments? (e.g., CO2 emission reduction, water saving, etc.)
No
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C3.2 – Does the framework provide a taxonomy of potential environmental impacts?
Yes
(2), (3), (4) and (5) – Annex 1
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Mongolian Sustainable Finance Principles – Agriculture Sector Guideline (MBA, 2014) | Mongolian Sustainable Finance Principles – Construction and Infrastructure Sector Guideline (MBA, 2014) | Mongolian Sustainable Finance Principles – Manufacturing Sector Guideline (MBA, 2014) | Mongolian Sustainable Finance Principles – Mining Sector Guideline (MBA, 2014)
C3.3 – Does the framework provide methodologies, tools, and/or templates to measure and report these impacts?
No
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Climate Risk Exposure Assessment
C3.4 – Does the framework ask FIs to monitor climate risk exposure at portfolio level?
No
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C3.5 – Does the framework refer to specific climate risk exposure methodologies (e.g., climate scenario analysis, climate risk stress testing, calculation of carbon risk exposure, tracking of energy efficiency for real estate portfolio)?
Yes
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C3.6 – Does the framework encourage FIs to take mitigating steps on these risks?
No
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Climate and Green Finance - Incentives
Financial and Non-Financial Incentives
C4.1 – Does the framework provide any type of incentives for green financial products and services?
No
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C4.2 – More specifically, does the framework introduce financial incentives on green products and services?
No
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