BOŚ’s Path to Achieving Climate Neutrality

BOŚ’s Path to Achieving Climate Neutrality

In the face of global climate challenges, the pursuit of sustainable development has emerged as a natural priority. What remains the overarching objective is to improve air and water quality through enhanced energy efficiency. In December 2019, the European Commission unveiled its flagship initiative, the European Green Deal, aimed at driving the Old Continent’s transition towards climate neutrality by 2050. Albeit a significant challenge for the economy, Bank Ochrony Środowiska views this as an opportunity it can seize.

What does the EU’s ambitious programme entail in practice? The ultimate goal is an environmental equilibrium where all greenhouse gas emissions are offset by carbon dioxide absorption. This objective has become legally binding following the enactment of the ‘Fit for 55’ legislative package, which, among other provisions, regulates emission trading schemes and sets national targets for reducing pollution to achieve a 55% emission reduction by 2030. A further reduction in net greenhouse gas emissions by 90% relative to 1990 levels by 2040 marks another milestone toward achieving climate neutrality in Europe by 2050.

How Can We Achieve Zero Emissions by 2050?

European Commission data indicates that climate change has inflicted economic damage estimated at EUR 170 billion over the past five years. The associated costs and increasingly significant and visible impact on people are growing. To enhance Europe’s resilience against potential future crises, immediate action is imperative. Its essential components should include open dialogue with all stakeholders in the green transition process and a fair and responsible social policy.

Energy efficiency improvements are crucial, yet costly. According to the International Energy Agency’s 2021 report, “Net Zero by 2050: A Roadmap for the Global Energy Sector”, nearly half of the carbon emission reductions by mid-century will stem from new technologies. The difficulty is that these are mostly still at the demonstration or prototype stage. Their commercialisation must occur rapidly, which necessitates substantial investments.

Social Responsibility in the Banking Sector

In response to such challenges, banks have taken on a critical role. They are no longer just financiers of environmentally-friendly projects but also stimulate the market, by establishing mechanisms that drive demand for eco-friendly products. By offering favourable financing conditions, banks incentivise customers to invest in projects that align with climate objectives. This showcases the financial sector’s effect on its broader environment.

In Poland, banks are trusted public institutions, with responsibilities that transcend mere business operations, including a mission to carry out initiatives that target not only internal organisational processes but also customers. This aspect of banks’ work, including efforts by BOŚ, is crucial for achieving sustainable development goals. Accordingly, implementing specific plans within this broader framework helps increase customers’ ESG awareness.

ESG and BOŚ’s Green Strategy

In the current BOŚ Group ESG Strategy for 2024–2026, we reaffirm our mission to comprehensively finance and support the green transition. We continue to unwaveringly follow the path set more than three decades ago. Over the past 30 years, BOŚ has funded close to PLN 27 billion worth of environmental projects. Currently, green loans make up about 40% of our total loan portfolio – a distinction that sets our bank apart not only in Poland but throughout Europe. Our goal is to increase the proportion of green assets in our credit portfolio to over 50% by 2026. We see environmental projects as a key area of collaboration with customers from the SME, local government, and agribusiness sectors. Thus, we are committed to expanding our green offerings to these groups more than ever before.

As we support our customers, we aspire to serve as ambassadors for green transition, driving environmental initiatives. This year, we intend to have the BOŚ Group’s decarbonisation strategy validated and commence its implementation. By 2026, we aim to achieve further milestones, including raising the proportion of hybrid or electric vehicles in our fleet to over 90%, cutting paper documentation by 50%, and completely switching to LED lighting.

Support for environmental initiatives would not be comprehensive without an educational component. The success of the green transition in Poland will be determined not only by financial resources but also by the expertise and experience we are eager to share. This objective will be met through the annual publication of a sustainable financing guide for the market and the development of the ‘Przystanek EkoBiznes’ online platform. We plan to provide both customers and employees with substantive support from environmental engineers across all our business centres. The said platform is designed to facilitate communication with these experts, while also acting as a valuable resource for understanding the solutions available to and challenges that confront the SME sector and local governments in executing environmentally-friendly projects.

Corporate Governance Policy

On the corporate governance front, BOŚ has pledged to redouble its efforts to develop a sustainable value chain. We are dedicated to conducting our operations transparently, employing the best market practices in ESG. We aim to sustain the low ESG risk rating we have been awarded by an independent rating agency on three occasions over recent years. With an ESG Risk Rating of 12.2, BOŚ ranks second among banks in Poland and is among the top 6% of financial institutions globally evaluated by Morningstar Sustainalytics.

BOŚ on the Path to Socially Sustainable Development

In the social dimension, responding to current market and societal challenges, Bank Ochrony Środowiska is engaging in numerous initiatives that reach beyond the confines of our organisation into the broader community.

We intend to run recurring educational and grant programmes under the auspices of the BOŚ Foundation, while also fostering collaboration with academic circles to promote knowledge and innovative solutions in environmental protection. Aiming to build stronger partnerships and community ties, we are focused on continuously increasing employee volunteerism. Additionally, by 2026, we plan to fully adapt BOŚ branches to be accessible to customers with mobility impairments.

We also remain committed to fostering a supportive environment for our employees, enabling the exchange of experiences and the acquisition of knowledge through both internal and external training programmes. An important part of this effort are our work-life balance initiatives.

Undoubtedly, Bank Ochrony Środowiska’s approach highlights the active involvement of the Polish banking sector in supporting sustainable development goals. Poland’s financial institutions are eager to be part of the global solution to the civilisation-induced climate crisis. Although meeting the ambitious EU environmental targets and adhering to strict EU regulations on climate neutrality presents a significant challenge, it is crucial for the wellbeing of our planet and all its inhabitants.

Bartosz Kublik, Vice President of the Management Board of Bank Ochrony Środowiska S.A., responsible for organising the Management Board’s activities

Last Updated on June 13, 2024 by Anastazja Lach