The ESG concept is not new, but its importance has grown in recent years, driven by increased awareness and concern about climate change, social inequality and corporate abuses
Global investors are paying more and more attention to ESG criteria and billions of dollars are being invested in companies that prioritize sustainable and ethical practices. As the British economist John Elkington said: “Profitability does not have to be at the expense of the planet and people.” It is proven that companies that successfully integrate ESG into their strategies often achieve better financial results in the long run.
The reputational element of the ESG concept, which was the basic motive in the 1980s and 1990s, has now been somewhat overcome. An increasing number of individuals and organizations are understanding the essence of the problem – to secure and preserve their business in the long term, but not at the cost of affecting the health and well-being of the community and the planet. As Thomas Fuller once wrote: “We never know the worth of water till the well is dry.” Similarly, the value of ESG in business is becoming increasingly clear as we face growing social and environmental challenges.
On the other hand, regulatory bodies are insisting more and more on the implementation of ESG standards. As issues such as climate change and social inequality become more pressing, governments around the world are introducing laws that oblige companies to address these issues. As the famous American politician Al Gore said: “Continuing doing business according to the old model is no longer sustainable, neither economically nor environmentally”.
The trend is set in such a way that the demands of investors and regulators are becoming stricter and more exclusive. More and more companies are expected to report in some form the impact of their operations on the environment and society. Carbon taxes will be prescribed for everyone who contributes to increased gas emissions through their business. This will encourage all companies to invest in solutions aimed at reducing them.
The European Central Bank has already identified climate change as one of the biggest risks for the economy and the financial sector and accordingly prescribed that banks must analyze climate and environmental risks, based on the Instructions on Climate Risks and Risks Affecting the Environment. The document set 2024 as the year by which all banks in the European Union must adapt to the rules prescribed in the Instructions.
“Continuing doing business according to the old model is no longer sustainable, neither economically nor environmentally.” – Al Gore
Accordingly, our parent NLB Group, as a leading banking and financial group with its headquarters and exclusive strategic focus on the region, formalized the principle of sustainable development in 2011, and confirmed it in 2020, placing it at the centre of its business.
NLB Group, and thus NLB Komercijalna Banka, are signatories of the Principles for Responsible Banking of the United Nations, as well as the Net-zero banking alliance. These initiatives oblige the bank to become Net-zero by 2050, i.e. that the quantity of greenhouse gases emitted thanks to its own operations be equal to the quantity of gases that, through various initiatives, have been removed from the atmosphere.
The bank has committed itself to defining gas reduction targets until 2030, as well as targets for every five years between 2030 and 2050.
All the electricity we used in 2022 (about 10gwh) came from renewable sources, which reduced our carbon footprint by more than 6,000 tonnes (thanks to purchasing electricity from renewable energy sources), which is 64% less compared to the previous year.
We have implemented a paperless procurement process, which means that procurement in the bank is done exclusively electronically and with no paper in all steps. Sustainability as a criterion in the procurement process is very important to us, which is why we give preference to suppliers who contribute to the protection of the environment and society or promote these values.
We will soon put into operation our first solar power plant installed on the roof of our office building. The plan is also to gradually replace our vehicles with hybrid and electric cars, plus to get our employees to start using electric bicycles for shorter distances.
We are proud of the projects thanks to which we have been raising public awareness of the importance of sustainability and helping the communities in which we operate, and I am primarily referring to Organik, Support Framework and Housing Loans for Young People. We firmly believe that with projects like this, we encourage thinking and discussion about a sustainable future.
The road to a sustainable future is neither easy nor short, but we must undertake it, not only for our sake but also for our children and generations to come. Let’s work together to create a better future and make our country Serbia and planet Earth a great place to live and for new generations.