Responsible banking

To help our customers to improve their carbon footprint and make their transformation a sustainable success, we need to be able to assess transactions and projects on the basis of ESG criteria and advise our customers accordingly. In 2020, RBI devised a harmonized definition of sustainable customers (including the customer ESG score) and transactions, and made it available to the whole of the RBI Group in the form of an ESG rulebook.

RBI’s Retail Banking division (private individuals and SMEs in CEE) has also published its own “Framework for Green and Social Loans”, which was also validated by Sustainalytics. By publishing such a framework, we aim to ensure that our green and social loans to retail banking customers are aligned with Green and Social Bond Principles and also meet regulatory requirements, and we expect that additional assets can be flagged as green or social.

RBI has set itself the goal of providing best-in-class ESG advisory for customers and ensuring a high standard of quality. The dedicated ESG Advisory Team at head office performs expert analyses and evaluations of corporate and institutional customers from an ESG perspective and helps our customers to identify green and social aspects of their business profile.

To ensure increasing integration of the topic of ESG risks and negative impact prevention into the overall financing process, RBI AG has implemented corresponding processes and also plans to implement these gradually within the Group in future. For example, a list of corporate activities in which RBI AG does not wish to be involved (“exclusion list”) was drawn up. In addition, employees received training on identifying certain signals which indicate that certain activities and sectors are particularly critical from a sustainability perspective.

Another focal point within the ESG strategy is the development of ESG branding and expertise in order to strengthen awareness of change. RBI continuously offers in-house training on sustainable financing and on general ESG aspects in order to promote awareness of ESG issues. The Sustainable Finance Team at head office is responsible for ensuring that the knowledge and experience on transaction qualification generated at RBI AG is shared with the subsidiary banks in Central and Eastern Europe and expanded by means of a dialog with them.

RBI AG’s ESG Advisory Team provides in-depth and intensive advice on various sustainable financing formats geared towards customers’ business models and sustainability strategies. These sustainable financing formats can cover a wide range of financial instruments (bonds, Schuldschein loans, syndicated loans, bilateral facilities, etc.) and a variety of sustainability formats (linking with ESG ratings or sustainability targets, or linking through proof of use of funds).

For this earmarked financing, it is necessary to verify whether corresponding projects comply with the sustainability standards specified by the market. The basis for this assessment is provided by the EU Taxonomy Regulation and the ICMA standards. The ESG Advisory Experts support our customers in verifying the suitability of various projects and activities with regard to EU Taxonomy compliance and as regards RBI’s internal definitions of green, social or sustainable transactions, which also refer to best market practice. When engaging in dialog with customers on ESG-linked formats, it is especially important to jointly define material KPIs which are of importance for the customer’s sustainability and business strategy. When establishing the annual target values, care is always taken to ensure a certain degree of ambition, and that the ESG KPIs represent a significant improvement in the customer’s sustainability position.

In addition, the ESG Advisory Team advises customers on different ESG ratings and supports them in the verification process for obtaining a second party opinion. More in-depth subject-specific advice can be provided where necessary, for example with regard to net zero matters or the Science Based Targets initiative.

RBI AG engages in a regular and continuous dialog with its institutional customers on ESG developments and the realization of ESG-related transactions throughout the investment banking product universe, such as bonds, syndicated loans, asset-backed financing, fund finance, M&A and equity capital markets (ECM) products. This takes place in close cooperation and coordination with ESG experts and the respective customer relationship managers.

Our focus is on supporting our customers in their green transition and becoming their first choice for retail ESG products. We developed solutions which aim at better understanding customers’ carbon footprints and provided products with an environmental and
social impact that, for the first time, allow retail customers to receive a superior supply of sustainability-oriented solutions.

We aim to increase green and social lending new sales to private individuals and small-business customers. RBI has introduced green mortgages. The product is now available for retail customers in six of the markets: Hungary, Romania, Slovakia, Bosnia & Herzegovina, the Czech Republic, and Albania. Green mortgage loans are lending products secured by real estate and are made available exclusively to finance or refinance, in whole or in part, new and/or existing transactions with a specific use of proceeds as defined by the Framework for Green and Social Loans.

Furthermore, in 2022, RBI also launched green unsecured purpose loans for private individuals and SME customers in Albania, Slovakia and Bosnia, respectively. All eligible green and social loans provide clear environmental and/or social benefits. The use of the proceeds of these loans and eligibility criteria are stipulated in the Framework.The flagship product line is the fund business, although there was also a focus on certificates and green bonds. The target customer base was extended from private banking to premium banking, and also to retail business at some subsidiary banks in CEE.