BOV playing central role in Malta’s ESG strategy
“Following the Green Deal, an ambitious plan to decarbonise the European Continent by 2050 and boost green growth and innovation, the banking industry has been entrusted at EU level to play a central role for organisations to meet their ESG targets by adjusting their financing strategies towards sustainable activities, as well as supporting industries and governments in meeting their ESG targets. The ultimate goal is the democratisation of Europe’s Financial System,” this was stated by Clint Flores, head ESG Department at Bank of Valletta during ESG for Businesses, a webinar organised through the collaboration between the Gozo Business Chamber and BOV.
“When considering any new lending, banks, besides the usual lending criteria, are now obliged to start screening projects in terms of physical and transition risks, and the accompanying impact on biodiversity, said Flores. “Physical risks can be deemed as acute, as in the case of heatwaves, droughts, floods and severe storms, or chronic such as mean temperature, soil erosion or rise in sea levels. Transition risks are business-related risks that follow societal and economic shifts toward a lowcarbon and more climate-friendly future. These risks can include policy and regulatory risks, technological risks, market risks, reputational risks and legal risks.”
“What can we do as a business to mitigate such climate events? The question that we need to start asking ourselves is ‘How are we going to invest and redesign our business models?’ We can start by enhancing the energy efficiency of our buildings, investing in renewable energy sources and in water catchment,” continued Flores. “The benefits include reduced CO2 emissions and mitigating future environmental problems, resulting in lower energy bills, thereby contributing to climate mitigation and adaptation.”
These exercises make it easier for banks to lend money, since the screening and reviewing process will be simplified and will also require less strict monitoring by the banks during the onboarding, reviewing and implementation stages of projects.