Sustainability, the circular economy and ESG are areas that are influencing the functioning of the European economy with increasing intensity and determining the direction of its development. Companies, public institutions or local governments alike are implementing more sustainable solutions, supporting their transformation towards reducing their carbon footprint or creating projects with a positive impact on local communities.
ESG is an approach shaped by the implementation of the concept of sustainable development. It takes into account environmental, social and governance factors that provide a framework for assessing the impacts and risks of business entities on the environment and the social environment.
The European Union is a leader in legislating ESG and implementing sustainability reporting, and our presence in the EU makes it imperative that domestic companies or institutions also implement reporting obligations. Sustainability and ESG reporting, while affecting mainly large companies and financial institutions directly, is not without impact on the SME sector. These entities are already required to provide ESG data to their partners, such as, for example, the origin of the wood used to manufacture furniture boards in the case of suppliers to the furniture industry.
More and more contractors are placing specific environmental and social requirements on suppliers already at the stage of tendering and purchasing processes – a fact that is not without its impact on Poland’s SME sector, which works to a significant extent with large companies and multinational corporations. Such requirements are forcing our domestic entrepreneurs to transform and invest in projects that support sustainability in order to stay in the supply chains of larger players. Financing sustainable projects Financial institutions are also expanding their product catalog to include those in the field of sustainable finance in order to actively participate in supporting transformation and financing sustainable development. Such products include loans with preferential financing terms for green projects or green bonds.
At Bank Gospodarstwa Krajowego, recognizing the market’s need for a financing offer for such investments, we have made available the “Financing to support sustainable investments” offer. The solution is addressed to companies that:
- according to the EU taxonomy, have transformation needs towards sustainable operations,
- are planning an investment that makes a significant contribution to achieving environmental and climate goals, and are seeking external financing for its implementation.
The offer applies to financing sixteen types of investments. For each type of investment, we have indicated one technical criterion that must be met. Thanks to this, the offer can also be used by companies that are just getting acquainted with the EU taxonomy and its rules of application.
Offer benefits:
- no investment loan origination fee and a lower margin
- lower fees for maintaining a current or auxiliary account – lower monthly subscription fees for electronic banking
- lower fees for electronic domestic transfers to an account at another bank using the ELIXIR system – more attractive interest rates on individually negotiated deposits
- individually negotiated exchange rates / derivative transactions
ESG in local governments
Growing expectations for the broader transformation of economic actors are, and will increasingly affect local governments as well. For municipalities, one of the important planning factors is to look holistically at a given area of ESG in both environmental and social contexts, and to see its role in setting the direction of local economies and communities.
-Local governments, since the Bank’s inception, have been a key partner. For more than 100 years we have accompanied them in their social and economic development, supporting key projects and investments in thousands of municipalities in the country. Meeting with representatives of local governments, we have noticed that they are increasingly interested in the ESG approach and pay attention to the implementation of investments in the spirit of sustainable development, and there are more and more new investments in the region implemented by local governments also in the spirit of ESG and circular economy.
In pursuit of the bank’s mission, we are supporting more and more such investments, and BGK’s openness to financing ESG and sustainable development projects has resulted in the preparation of special solutions for entities interested precisely in green investments. We have launched support for the implementation of sustainable investments in the form of a preferential offer “Financing to support sustainable investments,” available to both municipal sector entities and entrepreneurs. In turn, we offer local government units and municipal companies support from the Green Transformation of Cities instrument – these are KPO funds, and projects implemented under this solution must comply with the DNSH principle, which means that no activities financed from EU funds can deteriorate the environment and contribute to the escalation of the climate crisis – says Jozef Piętoń, director of BGK’s Silesia Region.
ESG education
At BGK, we also attach particular importance to educating our business partners on the implementation of such projects. Our experts from the ESG Risk Office have prepared, among others, a film on ESG in local governments and a training course “Sustainable Development in SMEs”, available on the PARP platform: www.akademia.parp.gov.pl.
The course is aimed at entrepreneurs from the SME sector who would like to start implementing the assumptions of sustainable development into the daily practice of business management, as well as people who want to start their professional work in the area of sustainable development and ESG. The content prepared by bank experts allows you to identify which industries are high-risk sectors in the context of sustainable development, areas of environmental and social impact of the enterprise. After completing the course, entrepreneurs will know how to conduct environmental and social benefit and risk analyses and what sustainability reporting is.
Bank Gospodarstwa Krajowego is a Polish development bank, the only such institution in the country. BGK supports Poland’s sustainable social and economic development. It cooperates with the public sector and local governments. It supports housing construction, infrastructure development and entrepreneurship, including foreign expansion of Polish companies. It finances investments of strategic importance to the country’s security. It is the operator of government programs, manages and distributes European funds. The bank has representative offices in Brussels, London, Frankfurt am Main. In 2024 it celebrated its 100th anniversary.
The article appeared in the December issue of Business HUB.
Downloadable online PL version of the issue: HERE.