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21 June, 2024
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Banks stress need for government support in ESG initiatives

Hellenic Bank CEO highlights risks and opportunities in green economy shift

Panayiotis Rougalas

Panayiotis Rougalas

Banks are urging a combination of government and regulatory policies to achieve a healthy, effective, and optimal green transition in Cyprus.

The banks stress their key role in this transition, emphasising that while they should make significant financial contributions, the government must also align its policies with the banks to facilitate the green transition. Five bankers—Elisa Livadiotou (Bank of Cyprus), Antonis Rouvas (Hellenic Bank), Andreas Petsas (Eurobank Cyprus), Miltos Michaelas (Alpha Bank of Cyprus), and Aristides Vourakis (Astrobank)—point out that past large-scale projects succeeded due to close cooperation between the state and banks. The post-memorandum era demonstrated that such cooperation yielded significant results, including implementing numerous reforms and managing health crises, such as the loan repayment suspension programme.

The European Central Bank (ECB) supports the green transition, stating that reducing carbon emissions is essential to avoid the worst impacts of climate change. The European Union has committed to reducing emissions by 55% by 2030 and achieving a net-zero economy by 2050. While governments and lawmakers primarily drive this transition, the ECB also aims to promote sustainable finance and green monetary policy operations, without compromising its primary objective of price stability.

Elisa Livadiotou: Advocating for a sustainable future

At the "Cyprus Green Agenda Summit 2024," Elisa Livadiotou, Executive Director of Finance at the Bank of Cyprus, declared the bank's determination to lead Cyprus towards a sustainable future. Financial institutions must integrate Environmental, Social, and Governance (ESG) risks and opportunities into their strategies, governance, and risk management frameworks. The Bank of Cyprus is committed to sustainable banking and further integrating ESG into its infrastructure, strategies, and policies.

Antonis Rouvas: Balancing risks and opportunities

Antonis Rouvas, CEO of Hellenic Bank, highlighted the increasing emphasis on the environmental aspect of ESG due to the evident impacts of climate change. He stressed that transitioning to a low-carbon economy involves both risks and business opportunities, and success depends on linking ESG to the core business purpose, recognising it as essential rather than optional.

Andreas Petsas: 2024 as a pivotal year for banks

Andreas Petsas, Senior General Manager of Eurobank Cyprus, stated that 2024 is critical for banks to make significant progress on ESG issues and fully address climate and environmental risks. He noted that banks play a vital role in the green transition, which should align with efforts to reduce costs and waste, aiming to lower inflation while maintaining high employment levels. Delaying the green transition increases natural risks for countries and their economies.

Miltos Michailas: Promoting cooperation between private and government sectors

Alpha Bank Cyprus CEO Miltos Michailas emphasised the bank's significant role in Cyprus's green transition. He argued that achieving common ESG goals, which promote economic growth in line with environmental and social responsibility, requires cooperation between private and government entities.

Aristides Vourakis: Supporting long-term goals of the EU green deal

Aristides Vourakis, CEO of Astrobank, stressed that banks have a crucial role in supporting the long-term goals of the EU Green Deal. He noted that meeting the 2030 climate reduction target requires an additional €275 billion in annual investments. Banks are expected not only to provide finance but also to influence changes in the business environment and undergo transformation themselves as part of the transition. "Banks bear significant responsibility for the emissions produced by the industries and companies they finance, and managing these financed emissions is challenging," he said.

[This article was translated from its Greek original]

Cyprus  |  economy  |  banks

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