At its annual general meeting held today, Erste Group -- whose over EUR 166 billion in consumer loans make it a leading lender in Central and Eastern Europe -- declared that the pursuit of environmental, social and governance ("ESG") aims would be one of its strategic focal points in the future.
CEO Bernd Spalt: “As tough as this crisis has been, I believe it marks a turning point in many respects. A rethinking is taking place in the interplay between global efficiency and local resilience. Sustainability will be an integral part of this post-Corona world. At Erste, we’ve used the year 2020 to prepare ourselves for the post-crisis era – an era in which environmental protection, social responsibility and good corporate governance will be central strategic priorities. With our Responsible Finance Policy, we have also aligned our lending rules with these themes.”
Erste Group’s recently communicated decision to phase out coal financing by 2030 is also derived from this policy, Spalt said at the AGM. "Of course, I’m aware that there are people who would like to see a faster pace,” Spalt continued. “I understand that. But at the same time, as a bank we have an obligation to show care and caution when accompanying our customers through this transformation. Turning things off all too quickly would either lead to other sources being found or to the radiators in some homes quickly turning cold."
Following the placement of a green retail bond for S IMMO and the first green and sustainability-linked bond for VERBUND, Erste Group recently also issued the first-ever sustainability bond of its own, which raised half a billion euros and was more than two times oversubscribed. The proceeds from this issuance are reserved for financing ecological and social projects. Bernd Spalt: "The European Union's 750-billion-euro Recovery Fund will unleash economic forces. We are preparing ourselves to help strengthen these forces." The banking group intends to focus on ESG issues also in further bank issuances.
ERSTE NOW PRODUCES ITS OWN ELECTRICITY
Erste Group aims to successively reduce its own carbon footprint until it achieves carbon neutrality. That footprint has already been reduced by a quarter since the signing of the Paris Agreement (late 2015). The company’s headquarters at the Erste Campus in Vienna is being supplied with 100% green-sourced electricity. Recently, a photovoltaic system with 764 modules was also installed over an area of about 2,000m2 on the roofs of Erste Campus buildings. This PV installation can produce up to 250,000 kilo-watt-hours per year, the equivalent to the energy consumption of 125 households. With this step, “Erste Campus has become a small power plant," as the bank’s CEO pointed out in his speech to shareholders. "I know that these steps are not enough in and of themselves – but it’s a start.”