What are the main financing challenges that companies face when transitioning to sustainable business models, and how does Raiffeisen Bank help overcome them?
The sustainability challenges in business are extensive and diverse, encompassing a wide range of issues such as significant expenses, variable regulations, or adapting to new consumer preferences. The adoption of sustainable practices and technologies frequently necessitates substantial upfront investments, posing a challenge for companies, especially when approached vs ROI. The profitability of sustainable initiatives may not be immediately apparent, presenting a difficulty for companies to accept the allocation of financial resources to these projects.
On the other hand, when discussing long term, it is evident that the adoption of sustainable practices can yield long-term financial advantages and heightened operational efficiency. For instance, through the utilization of energy-efficient technologies and effective resource management, organizations have the potential to reduce expenses, and consequently, augment their financial performance, while diminishing their GHG footprint.
Another facet lies in the various dimensions affected by the transition to sustainability. Market observations indicate that the journey towards sustainability often coincides with digitalization, resulting in a dual transition. This integrated shift highlights the significance of utilizing technology and innovation to promote sustainable practices and boost overall performance.
In Raiffeisen Bank Romania, we offer a diverse range of sustainable finance options like green loans, green and sustainability bonds, social loans, green mortgages etc. that are designed to assist and support the transition to sustainable business models for our client, may they be SMEs or Large Corporates. I would highlight here that beyond Raiffeisen green financial instruments stands, in fact, a strong value of our organization that is resourcing and targeting our commitment to sustainability transition.
Are there any specific financing instruments, such as green bonds or sustainability-linked loans, that you offer to corporate clients aiming to improve their ESG (Environmental, Social, Governance) performance?
Raiffeisen Bank is the first bank, on the local capital market, that issued both green and sustainability bonds. The raised funds are allocated to support sustainable initiatives that meet the eligibility criteria outlined in the Bank's Sustainability Bonds Framework. Currently, Raiffeisen Bank offers a various range of type of financings, starting with green loans, sustainability linked loans, social loans and green mortgages for PI. Our objective is to create a positive social and environmental impact, sustaining our clients toward sustainable business models, regardless of where they are in this transition, at an advanced level or just starting the sustainability journey.
What trends do you see in Romania regarding the adoption of green financing, and how does Raiffeisen Bank contribute to accelerating the transition to a sustainable economy?
2025 contours itself as a challenging year. We can easily identify, coming out with the first CSRD reports, that businesses are facing rapid influx of aspects regarding their progress on sustainability. For the advanced players in sustainability, the situation positions both as an opportunity and a challenge. By leveraging advanced digital reporting tools, businesses strategically allocate investments for maximum impact and harness the transition to net zero as a catalyst for innovation and value creation.
By the conclusion of 2024, various sustainability measures were implemented, such as the Voluntary Reporting Standards for Small and Medium Enterprises (SMEs) by EFRAG. Despite the forthcoming exemption of listed SMEs from reporting obligations with the Omnibus future implementation, these initiatives underscore the ongoing significance of business environment impacts tackling and monitoring.
What sectors in Romania do you consider most promising for green investments, and where do you see the biggest impact of sustainable financing in the coming years?
In Romania, we identify several sectors with high potential for green investments. The renewable energy sector is specifically appealing due to Romania's geographical position. Real Estate with energy-efficient building construction is still a frontrunner in green financing, and we consider that the sector generates future prospectus business. Additionally, other sector like sustainable agriculture, waste management, and circular economy practices are likely to attract significant sustainable financing in the coming years due to the potential for long-term environmental and economic benefits.
Over the past years, Raiffeisen Bank's corporate sustainable portfolio has expanded in size, diversity, and complexity as a result of acquiring expertise and engaging with clients through dedicated teams of sector specialists and sustainable finance experts. This strategic approach positions Raiffeisen Bank well to drive sustainable development and address the evolving needs of the market.
