Financing Our Future: Pioneering A Green Economy in 2022 | RBI Insights

To meet the Paris Agreement's goal of limiting global warming to under 2 degrees Celsius, and ideally 1.5 degrees Celsius, compared to pre-industrial levels, we need to take concrete measures to adapt to and reduce the effects of climate change in the real economy.

The financial sector plays a crucial role in the pressing task of achieving sustainability.
Undoubtedly, moving towards a sustainable economy presents both challenges and opportunities for businesses, significantly impacting financial institutions.

To achieve the objectives of the Paris Agreement, the EU high-level expert group on sustainable finance, established to advise the European Council and Commission, puts forth two mandates for sustainable finance:

1. enhancing the role of finance in promoting sustainable and inclusive growth while mitigating climate change, and
2. reinforcing financial stability (HLEG, 2018).

While the banking sector debates new regulations and incorporating ESG scores alongside company profitability indices, the most significant impact may come from the revolutionary shift in mindset required by consumers and businesses. They have to be willing to adopt sustainability as the new standard for conducting business. Sustainability is vital – as the latest IPCC data indicates it's the only feasible future. Delaying real action could result in catastrophic consequences, as the planet is on track to surpass a 1.5ºC temperature increase in the near future, and at this point, only urgent action to reduce carbon emissions can prevent an environmental disaster.

In economic terms, sustainable finance is crucial for achieving overall sustainability, leading to a growing emphasis on the environmental impact of the financial sector.

Raiffeisen Bank Romania recognizes its crucial role in the shift towards a sustainable economy and is committed to being a leading force in this mission, collaborating with clients and society. The bank continues to integrate ESG principles in its daily operations and offers advisory services to its clients. 

Our focus lies in providing a range of sustainable financial products, including green loans, ESG ratings and KPI-linked loans.    

• Notably, 14% of our corporate portfolio is composed of green projects, covering areas such as sustainable transport, renewable energy, and green real estate.        
• In the past year, 40% of our mortgage loans to private individuals were granted for financing class A energy performance buildings. Raiffeisen Romania was also the first bank to offer a green mortgage loan to clients looking to acquire Romanian Green Building Council certified homes.       
• Furthermore, we were the first bank in the local market to issue green bonds that aim to support Romania's transition to a sustainable and carbon-neutral economy. Recently, we also introduced sustainability bonds that cover social financing, such as accessible housing, education, essential health services, and infrastructure.       
• Finally, we offer dedicated sustainable loans to SMEs, such as a bio loan for agribusinesses practicing sustainable agriculture and a loan for SMEs seeking to install solar panels for their facilities.

We offer ESG advice, consultations, events, and educational programs for SMEs in addition to our ESG products. We also put a lot of focus on the development of our colleagues, who are crucial to our sustainable strategy. Plus, training materials on ESG topics are available to all employees.

Our sustainability efforts are confirmed by our clients' willingness to engage, and we believe that our actions today will build lasting relationships and demonstrate our commitment to financing sustainability.