High-level Conference on Green Finance in South East Europe: Developing Capacities and a Taxonomy

Jun 22, 2023 Tirana, Albania No Fee

May 12, 2023 Financial Stability and Prudential Supervision

English

In 2022, senior staff working on Banking Regulation and Supervision (BRS) in competent authorities in the CEF constituency in South East Europe agreed to meet regularly to exchange knowledge and experience. On June 22, 2023, we will convene in Tirana the ministers of finance and central bank governors of the CEF Governing Board, as well as members of the BRS Knowledge Sharing Community for South East Europe to review together initial progress made, challenges experienced and good practices developed, and map out next steps how the region could contribute to ensuring the continent will be the first climate-neutral continent by 2050.

About this event

“Climate change is a threat to human well-being and planetary health” (IPPC 6th Assessment Report, 2022). The growing global awareness about the need for decisive action to deal with the increasing risks urges governments and investors to act. In 2015, countries committed in Paris to cut greenhouse gas emissions; subsequently, the EU established the ambitious goal to become the first climate-neutral continent by 2050. The financial sector plays an important role in reaching this goal, as it finances the transition to a low carbon economy. At the same time, the financial sector is especially exposed to the risks of climate change. The 2006 UN Principles for Responsible Investment set the ground for paying more systematic attention to environmental, social and governance (ESG) risks and opportunities in investment decisions.

Financial activities explicitly aimed at better environmental outcomes are referred to as green finance. The share of green finance in debt securities issued by governmental entities and corporations has been growing exponentially over the last decade. Europe has become the leading region issuing green bonds, covering more than 50% of the global market in 2021 (Statista.com). A European green transition agenda has been put forward to align and speed up green investments, while the framework to promote green finance is still evolving, currently around the following three key legislative acts – the EU Taxonomy Regulation, the European Green Bond Regulation, as well as the Corporate Sustainability Reporting Directive (CSRD). The ECB is aligning its guidelines with the progress made on the EU’s evolving legal framework.

Ministries of finance, central banks, as well as other competent regulatory and supervisory authorities lead actions towards stronger ESG of the financial sector. While working jointly on this agenda, they serve different mandates. Ministries of finance seek effective ways to tap into the growing market for green bonds, mobilizing funds for green public expenditures, and coordinating the capacity development of the public sector needed to be compliant with the ESG eligibility criteria and requirements. Central banks (and other competent authorities) seek to address climate change risks to the economy as part of their monetary policy framework, and ensure that the financial sector is developing resilience again such risks.

Public institutions in the EU and the European System of Central Banks are among the front-runners in shaping the global regulatory environment, and showcase some of the best evolving practices available so far. Following their example, most institutions in South East Europe are at initial stages of developing a strategic perspective and implement initial action for green finance. They capture, for example, the given capacities and opportunities and establish soft guidelines to encourage progress, while preparing key actors to get ready for more ambitious steps and anticipated further tightening of ESG criteria. Whereas the capacities and taxonomy on green finance are developing quickly, there are still many gaps that require careful coordination, iterative adaptation, and constant learning.

Conference Agenda

09:30-09:45 – Welcome – Governor G. Sejko, Bank of Albania; Minister of Finance and Economy D. Ibrahimaj (tbc); Jana Repanšek, CEF Director [at this opening part, the Albanian press will be present]
09:45-10:00 – Setting the Stage – Vice Governor T. Žumer, Banka Slovenije
10:00-10:45 – Part 1: Initial Progress, Challenges, and the Way Forward – CEF Governing Board Members, moderated by Robert Bauchmüller, CEF Chief Officer | Strategy & Lea Reitmeier, INSPIRE/LSE Policy Analyst (Sustainable Finance)
10:45-11:55 – Part 2: Making Green Finance Work in Practice – Senior Banking Regulators and Supervisors, moderated by Matija Čarman, CEF Specialist | Learning Program
11:55-12:00 – Future Learning (key take-aways) – M. Erman Vranicar, Senior Adviser, Ministry for Foreign & European Affairs, Slovenia
Closing – Governor G. Sejko