FirstBank leads Puerto Rico’s banking sector in sustainability disclosures
A University of Puerto Rico study finds gaps in how top banks report progress toward UN Sustainable Development Goals.
A new academic study authored by Marisela Santiago-Castro at the University of Puerto Rico-Río Piedras has found significant differences in how Puerto Rico’s three largest commercial banks align their public sustainability disclosures with the United Nations Sustainable Development Goals (SDGs).
Published in the “Corporate Governance and Sustainability Review,” the findings provide the first comprehensive local evaluation of nonfinancial disclosures by Banco Popular, FirstBank and Oriental Bank, based on international sustainability benchmarks.
The analysis used manual content review, artificial intelligence tools, a compound index and a multicriteria decision-making model to assess each bank’s integration of the SDGs into their standalone sustainability reports and other public documents.
FirstBank earned the highest sustainability index score (66.67%), followed by Banco Popular at 55.56%. Oriental Bank trailed with a score of 3.92%, indicating limited integration of SDGs into its disclosures.
“All the Puerto Rican commercial banks disclosed their sustainability development strategies in a standalone sustainability report,” the study noted. “Nevertheless, the level of structure, the reporting style and the content of the report varied significantly among the institutions.”
The research found that “only FirstBank provided comprehensive and quantitative disclosure” of its SDG commitments in its 2022 sustainability report. The presence of a chief sustainability officer and use of international frameworks also contributed to FirstBank’s lead.
The study introduced a “closeness coefficient” to measure alignment with ideal SDG practices. Banco Popular ranked highest under this metric (0.997), followed by FirstBank (0.903). Oriental scored zero, consistent with the hypothesis that smaller institutions dedicate fewer resources to sustainability initiatives.
Across all three banks, the most commonly referenced SDGs were SDG 8 (Decent Work and Economic Growth) and SDG 4 (Quality Education), followed by SDG 5 (Gender Equality), SDG 13 (Climate Action), and SDG 10 (Reduced Inequalities).
Banco Popular had the highest total number of SDG-related references (180), followed by FirstBank (143) and Oriental (13).
While the study found evidence of SDG alignment in Puerto Rico’s banking sector, the author concluded that more progress is needed.
“There is a long way to go to fulfill the SDGs by the 2030 deadline,” the report stated.
The University of Puerto Rico’s Institutional Fund for Research supported the study.
