Today, the Magyar Nemzeti Bank published its new supervisory recommendation for credit institutions on climate-related and environmental risks. The document will be applicable from this June, with some provisions applying only from 30 June.
The document sets out requirements for managing risks arising from climate change and other environmental challenges with considerations for the integration of environmental sustainability into bank’s activities.
Due the importance of the issue, the MNB launched a public consultation as well while entering into discussions with the affected trade associations. The Bank received constructive contributions from both banks and non-governmental organisations which have been incorporated into the final text. The anonymized and aggregated proposals have been made available on the Bank’s website (available only in Hungarian). Based on the suggestions, requirements were fine-tuned and improved, among others, in relation to internal governance, the ecological footprint, as well as sections focusing on climate change as a business opportunity.
The Magyar Nemzeti Bank (Hungarian national monetary bank) expects credit institutions to draw up self-assessments and action plans and submit them by 30 September 2020, the implementation of which the Bank will monitor on a continuous basis.
Simultaneously with publication of the document, the Bank has made available a ‘Knowledge Base’ for credit institutions on its GreenFinance.hu website (available only in Hungarian). This will help banks to comply with the supervisory recommendation as soon as possible and to the greatest extent possible by presenting a collection of practical examples, good practices, available data sources as well as methodologies.
Csaba Kandrács, Deputy Governor of the Magyar Nemzeti Bank, presented the key messages of the new supervisory expectations at an online conference.
As guest speaker János Bálint Mező, Executive Director of Greenpeace Hungary, pointed out: creating a genuinely sustainable society is possible only if we learn to live within the natural limits again, for which the financial sector bears a special responsibility and may play a leading role in the future. The speeches were followed by a panel discussion of senior managers of commercial banks (K&H, MKB, OTP and Raiffeisen Bank), where the attendees debated the challenges posed by the integration of environmental considerations into bank’s operations and opportunities to expand green finance.
The recordings of the conference can be viewed on the Magyar Nemzeti Bank’s YouTube page (only available in Hungarian).
Cover picture: unsplash / Ami Hirschi