The banking system is ready to enhance the knowledge and provide the right tools to accelerate the green transition of all its businesses/customers, regardless of their maturity level today, points out in an interbank information brochure entitled “The ESG opportunity for businesses and the Greek economy” which was posted on the website of the Hellenic Banking Union. As pointed out, the multi-level support of Greek businesses with financial solutions, innovative services, initiatives and actions aimed at long-term development, tackling modern challenges and therefore their sustainability is a perennial commitment of the banks.

In this context, the banks are already cooperating with the aim of formulating an ESG framework of guidelines through the creation of a common questionnaire which will be available to their businesses/clients to complete. Through the recording and collection of relevant information, the timely recognition, evaluation and management of the performance of the business community in sustainability will be achieved, highlighting good practices on the one hand and preparing businesses for the upcoming changes on the other hand supporting their transition to a climate neutral and socially just economy.

The role of banks

Banks, as highlighted in the fact sheet among others, are called upon to integrate specific criteria (ESG) into their operation, to finance new sustainability infrastructure and low carbon technologies, and to develop financing tools for their businesses/customers, in order to invest in reducing of their environmental footprint. This venture is a multi-dimensional challenge for banking institutions but also for their businesses/clients, as they have to consider/assess climate and environmental as well as social risks during the financing process.

The role of business

Companies, in addition to their financial data, must calculate and manage environmental, social and corporate governance (ESG) issues, which are important, among other things, for their access to investment and financing capital. The sustainable economy should be a common concern and goal for banks and their businesses/customers, taking advantage of the benefits and the adequacy of resources provided by the EU through targeted programs (TAA, NSRP, energy saving programs, etc.).

The benefits for business

Research confirms the existence of a correlation between the performance of ESG indicators and a company’s financial performance. This fact proves that ESG information is essential from a financial point of view and should be evaluated by both banks and investors.

The potential benefits for a business from adopting sustainable practices with ESG criteria are:

• facilitation of access to financial capital,

• strengthening extroversion by providing cooperation opportunities with large companies that require the implementation of these practices from their partners,

• prevention / avoidance of any adverse financial and operational effects (fines, license revocation, etc.),

• improvement of environmental performance (reduction of environmental footprint) with potentially positive economic impact,

• strengthening the brand name and creating long-term value,

• facilitating your transition to the new environment with easier adaptation to upcoming changes in the legislative framework (e.g., climate law), to the requirements of new technologies, to the integration of circular economy principles and

• strengthening your cooperation with all interested parties (local communities of activity, customers, investors, staff, etc.).

EU initiatives and objectives

The European Union (EU) has prioritized addressing issues related to climate change and the environment, highlighting at the same time their social dimensions. However, the required scale of investment to transition to a climate-neutral, resilient and fair economy far exceeds the financing capacity of the public sector. For this reason, the European Commission proceeded with legislative/regulatory arrangements in order to create an investment framework according to sustainable financial criteria. In this way, the financing of sustainable investment projects is sought, which will necessarily take into account environmental, social and governance criteria, the so-called ESG criteria. At the same time, the EU, with the European Green Deal, undertook a series of ambitious commitments, with the primary goal of becoming the first climate-neutral continent by 2050. Achieving this ambitious goal requires the alignment of all funding sources, public and private, national and multilateral, as well as the cooperation of all interested parties.

Europe will need an additional investment of €350 billion per year to meet its 2030 emissions reduction target in energy systems alone, alongside the €130 billion needed for other environmental targets.