The NBG signs the second Cooperation Agreement with IFC to Boost Sustainable Finance
12 February, 2021
The National Bank of Georgia (NBG) signed a Cooperation Agreement (CA) with the International Finance Cooperation (IFC), a member of the World Bank Group. The agreement aims to support the NBG in its journey to developing a Sustainable Finance Framework, including sustainable finance products and governance of environmental and social matters (ESG) in Georgia. This is the second agreement that the NBG signed with IFC, after the first successful collaboration initiated in 2018.
The close cooperation with IFC in regards to sustainable finance started in September 2017, when the NBG joined IFC-supported Sustainable Banking Network (SBN) which is represented by 42 member countries, covering over 86% of banking assets in emerging markets. Since then, the NBG has been working with IFC/SBN on increasing awareness and capacity building, integrating ESG considerations into risk-assessment frameworks and decision-making processes of financial institutions, supporting market transparency, as well as actively sharing their experience with other SBN members.
One of the most important steps that the NBG has taken in close collaboration with IFC was the launch of the Sustainable Finance Roadmap for Georgia in April 2019. The Roadmap combines all possible steps planned by the NBG for supporting sustainable finance over the next few years.
As the NBG continues working on the development of a sustainable finance framework and is gradually implementing the action plan outlined in the Roadmap, the new CA ensures further support from IFC in partnership with the Swiss State Secretariat for Economic Affairs SECO and the Austrian Federal Ministry of Finance (BMF). The scope of the new agreement is broader and includes more comprehensive actions for the next two years. As highlighted in the agreement, the NBG will continue collaboration with IFC on awareness-raising events and capacity building. IFC will also provide support and expertise to the NBG while working on the development of Sustainable Finance Taxonomy, the aim of which is to provide the market with a homogeneous definition of green, social and sustainable economic activities. The CA also includes providing advice in the development of the corporate governance codes with a section on ESG matters to promote sound ESG practices among financial institutions and capital market participants. Activities to enhance ESG risk management among financial institutions also fall within the scope of the CA.
Leveraging the collective expertise and experience from IFC and SBN community, the IFC-NBG new agreement will support the successful implementation of the Sustainable Finance Roadmap for Georgia and further contribute to the development of the sustainable finance market in Georgia.