As one of the leading banking institutions in Central and Eastern Europe, we are committed to mobilising finance for a lower-carbon, more just, and more inclusive society. In our Climate Report, we report on our progress, targets, and actions towards a net-zero emissions portfolio by 2050 and net-zero operations by 2030. We have also started to align our approach with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) and provide an overview of climate adaptation, mitigation, and risk management.
Erste Group’s climate strategy is based on four pillars: sustainable asset management, transition to a net-zero operation, transition to a net-zero portfolio, and the integration of climate risks into the bank’s risk management.
The four pillars of our climate strategy aim to seize green growth opportunities and mitigate climate risks specific to our region. In parallel to the European Green Deal of the European Union, CEE countries are also working towards a fair and rapid net-zero transition. A series of measures are designed to steer the EU towards net zero emissions by 2050. The goal is to promote a just and prosperous society as well as a modern and competitive economy. As part of this transition, financial flows need to be aligned with a low-emission and climate-resilient future. Erste Group is well positioned to meet the challenges and seize the opportunities that emerge in these changing times.
Our climate strategy supports our region’s ability to mitigate and adapt to climate change and its main risks as identified by the Intergovernmental Panel on Climate Change (IPCC).
These risks include:
– Heat: heat-related environmental changes and health problems disproportionately affect low-income and vulnerable populations. This is particularly felt in the south and major cities of the region.
– Agriculture: drought, excessive rain, pests, and heat affect the productivity of crops, livestock, and forests. Crop yields will be more affected in our southern markets.
– Water scarcity: a change in weather patterns is reducing the availability of clean drinking water and sanitation across the region. Water-dependent sectors such as energy, paper, and agriculture are particularly affected.
– Flooding: our region will face the impacts of increased river flooding and flash floods. With a warming of more than 3°C, the damage could double. Extreme flood events will have a particularly intense impact in urban areas.
ESG risks are embedded in Erste Group’s Risk Management Framework. They are considered in our Risk Materiality Assessment, our Risk Appetite Statement, our risk strategy as well as in our industry strategies. Erste Group considers climate risks and environmental risks in a broader sense as transversal, i.e. they impact and are reflected in all existing risk types such as credit, market, liquidity risks, etc.
For more information about the sustainability approach of Erste Group, and in particular, about climate risks, please read our Climate Report 2023.
Read more articles from the ESGenius Letter on the topic of “Climate Risks” here!
For a glossary of technical terms, please visit this link: Fund Glossary | Erste Asset Management
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