Financial sector news

The National Bank of Ukraine supports the gradual and balanced implementation of ESG standards in the financial sector, taking into account the priorities of the state's defense needs. This was stated by Pervin Dadashova, Director of the Financial Stability Department of the NBU, during the forum “Strengthening Ukraine's Resilience: Launch of the Sustainable Development Financing Platform” and during a roundtable discussion of the Chamber of Commerce and Industry on ESG requirements within the framework of the state program “5-7-9” for small and medium-sized businesses.

According to her, the National Bank supports the introduction of environmental and social assessment primarily for clients who receive state support, in particular in accordance with the terms of the European Union's financial assistance program for Ukraine, Ukraine Facility.
The next step, she said, should be for banks to apply environmental and social assessments of clients in all areas of support, with the exception of lending to businesses operating in areas with high military risk. The introduction of such assessments is planned in the near future.

At the same time, the Director of the Financial Stability Department emphasized that the banking sector as a whole is ready to implement ESG standards, as it has been consistently moving towards sustainable financing for two years now.
The results of a repeat survey of banks on ESG risk management conducted by the National Bank in April show that more than half of banks have already developed environmental and social management systems.

The regulator's future plans include preparing methodological recommendations for building a corporate governance system and developing banking strategies for ESG risk management. Next year, it is also planned to detail approaches to ESG risk assessment by banks and gradually extend the relevant requirements to significant non-bank financial institutions.

Pervin Dadashova recalled that this year, the National Bank had already presented its vision for the implementation of ESG requirements in the financial sector in its White Paper on ESG Risk Management. At the same time, she stressed that effective implementation of ESG standards at the state level requires coordinated interaction between a number of institutions. “First of all, we expect the relevant ministries to develop a nationwide taxonomy and financial reporting requirements as soon as possible,” she said.