The integration of environmental, social and governance (ESG) issues by financial institutions and the management of ESG risks are pivotal prerequisites for the advancement of sustainable finance. Accordingly, ensuring the incorporation of ESG into risk management and decision-making of financial institutions is one of the four key pillars of the NBG’s Sustainable Finance Roadmap.
To enhance ESG integration by financial institutions and improve the management of ESG risks, including those related to climate change, the NBG has developed ESG Guidelines through a double materiality perspective. The ESG Guidelines, which adopt a holistic approach to ESG integration and risk management, were developed in cooperation with international experts and commercial banks and are based on the best international standards. The existing ESG risk management practices of commercial banks were also considered in the development process, making the Guidelines tailored for the Georgian financial sector.
The Corporate Governance Code for Commercial Banks sets requirements for commercial banks to integrate ESG issues and manage ESG risks. The ESG Guidelines aim to help commercial banks meet these requirements and provide main principles for managing risks and opportunities in line with international best practices. Furthermore, these guidelines will serve as a reference for the NBG, enabling the evaluation of existing ESG risk management frameworks within commercial banks and facilitating ongoing monitoring of their progress toward ESG integration and risk management.