A landmark cooperation agreement has been forged between the International Finance Corporation (IFC) and the Banking Association of Bosnia and Herzegovina (UBBiH). This collaboration is set to strengthen the environmental, social, and corporate governance (ESG) capabilities of Bosnia and Herzegovina’s banking industry.
The alliance strives to equip the banking sector with a comprehensive ESG strategy, encompassing crucial areas like adept environmental and social (E&S) risk management, climate governance, and transparency in sustainability reporting. This enhancement will be achieved by disseminating best practices anchored in IFC’s globally acclaimed methodology.
Samir Mustafić, UBBiH’s president, commented on the significance of this initiative:
As ESG norms, which mold corporate policies to resonate with sustainable environmental development paradigms, become pivotal, this partnership will immensely uplift our member banks. Given the evolving regulatory landscape introduced by banking authorities, it’s imperative to keep abreast with emerging green transitions.
Heightened scrutiny from global investors, combined with fresh regulatory directives—particularly from the European Union—make ESG risks a potential obstacle for private-sector investments in developing nations. The collaborative endeavor between IFC and UBBiH is poised to surmount this hurdle, assisting Bosnian banks in refining risk management while uncovering sustainable business avenues.
Nicolas Marquier, IFC’s Manager for the Western Balkans, underscored the importance of fortifying ESG and E&S risk management facets in banking. He remarked:
This enhancement not only catalyzes investments in socially and environmentally progressive projects but also propels the uptake of green, eco-friendly financial offerings.
The pact also resonates with IFC’s overarching ambition to stimulate sustainable and conscientious investments in burgeoning economies. It infuses a pivotal regional dimension into IFC’s holistic ESG initiative for Europe and Central Asia, executed in alliance with the State Secretariat for Economic Affairs of Switzerland SECO.
An integral part of the World Bank Group, the IFC stands as the premier global development institution fixated on the private sector within emerging markets. Operating across over 100 nations, the IFC amalgamates its financial acumen, expertise, and clout to spawn markets and prospects in developing regions.
The fiscal year 2023 saw IFC allocating an unprecedented $43.7 billion to private enterprises and financial entities in developing countries.
