by Johann Strobl, CEO Raiffeisen Bank International
More than 30 years after the fall of the Iron Curtain, Central and Eastern Europe (CEE) once again faces a huge upheaval: the transformation to sustainable and climate-friendly market economies. This process will most probably not produce iconic images like in 1989, but its dimension can be easily underestimated. It is a historic feat of strength that requires the interaction of society, business and politics, cross-border cooperation and, last but not least, persistence.
In this context, the question arises as to what contribution a bank can make to this ecological transformation. At the time, RBI played a pioneering role in the transformation of socialist planned economies into free market economies in CEE. Our ambition today is to position ourselves early and consistently again. We want to be the most recommended financial institution in the markets in which we operate by 2025. The prerequisites for this are not only innovative and customer-friendly digital products and services, but also social acceptance as a responsible company.
Awareness of the issue of climate protection is more pronounced in many markets in CEE than is generally assumed in Western Europe, where CEE is often perceived as a region that still relies very heavily on fossil energy sources and in which climate protection plays a subordinate role. However, our studies and analyses show a much more differentiated picture. Our customers in CEE are very much concerned with the topic of ESG, set sustainability goals and implement the necessary processes. We see the first tangible results, for example, in the strongly increasing demand for green financing. As the largest Austrian issuer of green bonds, we have built up extensive know-how in recent years, which we are now rolling out in CEE and making available to our customers.
We are at the beginning of a megatrend in green financing, which is fundamentally to be welcomed. It will not be possible to finance the necessary investments in climate protection without massive private capital involvement. However, it must be ensured that the demand for green investments is not damaged by green washing. It has taken a very long time for green investments to develop from a niche product to a standard product. The confidence of both private and institutional investors must not be destroyed. If the label indicates “green”, so must be the content. Against this background, we welcome the EU Commission's initiative to create a "gold standard" for green bonds.
Speaking of regulation: climate risks will play a central role in the bank stress test in 2022. It would be desirable if the effort and the knowledge gained were in a better ratio than it was the case with the stress tests of the past years.