Raiffeisen Bank International ‘goes green’ with ESG incentive scheme

Efma feature

18 July 2019

Andrea Sihn Weber, working as the Head of Group Sustainability Management at Raiffeisen Bank International (RBI), spoke to Efma about how the bank is embracing sustainable finance through its Green Bond Framework and ESG incentive scheme.

Raiffeisen Bank International’s Sustainability Strategy defines three main areas of responsibility: the ‘responsible banker’, the ‘fair partner’ and the ‘engaged citizen’, says Sihn-Weber. “They are closely linked to our business activities, whereby we endeavor to optimally apply our values and competencies in order to foster sustainable development both in our group and in society. RBI has integrated comprehensive sustainability measures in its business.”

“Environmental threats call for investments in sustainable business,” asserts Sihn-Weber. She cites rising global temperatures, increasing sea levels and ever-frequent extreme weather events as the driver behind RBI’s push for sustainability. In response to the menacing climate threat, in June 2018 RBI successfully launched the first Austrian benchmark-sized green bond (worth €500 million), and its green bond framework has flourished ever since.

“By issuing green bonds, RBI aims to increase the awareness for sustainability within the whole organization, leading to new initiatives and strategic synergies between internal and external stakeholders. RBI intends to be a regular green bond issuer in international markets as well as in the Austrian and Central and Eastern Europe (CEE) retail markets. Its comprehensive Green Bond Framework includes a wide range of green projects, including green buildings, renewable energy, waste management, energy efficiency and clean transportation,” outlines Sihn-Weber.

The inauguration of green bonds issuance has helped increase green lending in Austria and the CEE network, in particular to finance the construction of certified ‘green’ buildings in the region. “As of the end of February 2019, the Eligible Green Loan Portfolio consisted of real estate loans to finance green commercial buildings with a recognized certification with a minimum of LEED Gold, BREEAM very good or DGNB/ÖGNI Gold.”

Data is proving to be a powerful tool in measuring the impact of RBI’s Green Loan Portfolio. “In one of our network banks we started a data project to obtain the energy consumption indicators needed to calculate the impact of saved energy. The commercial real estate included in the green portfolio has considerably lower energy consumption than the average level for real estate in the respective country. The greenhouse gas emissions saved amount to 12,992 tons per year and 38,976 tons over 3 years for the entire Eligible Green Loan Portfolio,” explains Sihn-Weber.

In January 2019, RBI went one step further and introduced an Environmental Social Governance (ESG) incentive scheme. This is designed to stimulate the long-term development of green and social loan portfolios across RBI’s network banks in CEE and its headquarters in Vienna.

“The target of the ESG incentive scheme is to grow the sustainable finance portfolio and to back its green and social bond issuance activities. RBI established a transparent process to check green eligibility criteria on a case-by-case basis. If a loan matches RBI’s ESG incentive scheme, the customer will get an ESG discount and the loan will be included in the Eligible Green Loan portfolio. Our company intends to publish an impact report on an annual basis until full allocation and thereafter if there are any material changes to the Eligible Green Loans portfolio.”

Looking ahead, RBI plans to extend its sustainable portfolio to include “social loans that aim to finance or refinance education, healthcare, affordable housing, waste management, sustainable agriculture, public infrastructure and other socially beneficial projects,” according to Sihn-Weber.

Green bonds and ESG are just a part of RBI’s long-term vision of sustainability. “For more than 130 years, RBI has been combining financial success with socially responsible actions. Therefore, its sustainability activities have a long-term orientation. Our role in the economy is characterized by practical responsibility towards our customers, employees, shareholders and society. Sustainability and corporate responsibility are and will continue to be key components of our identity and corporate culture.”

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Keywords : Corporate social responsibility (CSR)

Geography : Austria