Green transition from the banking perspective in line with OTP ESG Strategy?

Balázs Balogh: I believe banks have a crucial role to play in supporting clients on their journey towards a sustainable future. OTP Group stands out as a leader in CEE by providing both the financing and expertise necessary for reaching a green transition while setting standards on how companies can incentivise corporate action on climate change. Following strategic objectives on ESG and sustainability of our parent OTP Bank Hungary, back in the summer of 2022, we defined our own ESG strategy and business principles with the ambition to have OTP Banka in Serbia as the market leader in green financing with steady transition towards own carbon neutrality along with keeping our role as responsible employer and CSR leader over the market. 

Further to our ambition relating to sustainable financing and in line with the regulatory environment, we have integrated environmental and social considerations into our investment and financing decision-making processes, whereas values relating to safeguarding human rights and promoting sustainable development are of paramount importance for us. We walk the talk in a quite transparent way as OTP banka publishes its ESG data annually in its audited Sustainability report, as non-financial reporting fully in line with the internationally recognised standards of the Global Reporting Initiative (GRI), as well as with the UN SDG (with direct contribution to 9 UN SGGs). Moreover, OTP Banka Srbija has become the official signatory of the UN Responsible Banking Principles - a unique, sustainable development framework developed through cooperation between banks across the world and the United Nations Environment Programme Finance Initiative. In addition to the Group level awards, I am proud that Euromoney highly regarded OTP Banka in Serbia as a market leader in ESG in 2023.

Blueprint for stakeholders in enabling sustainable green financing?

Balázs Balogh: Green transition, decarbonisation and sustainability create new business models, followed by adapted or new industries and ecosystems, impacting the emergence of new products, new types of customers and ways of financing their needs. We need to have regulatory frameworks to encourage investments in renewables, while the role of financial institutions is to provide finance and develop specialised financial products tailored to the renewable energy sector based on due diligence. From IFIs, we expect to provide grants and technical assistance, facilitate knowledge sharing and foster investment in energy infrastructure. On the other hand, project developers need to develop clear feasibility studies, collaborate with communities to address social and environmental concerns and mitigate risks through appropriate contracting strategies. Community and NGOs also have an important role in providing feedback on project impact on the environment and advocating for renewable energy adoption. All stakeholders together have to dive deep and educate about risks and benefits, encourage the integration of ESG factors in investment decision-making and facilitate access to capital markets for sustainable and renewable projects.

ESG is more than green financing. Can you please share how OTP Banka in Serbia is tackling S and G components?

Balázs Balogh: The Bank acts as a responsible employer and responsible community actor. Employees are the Bank’s most important resource, which is why it is extremely important to provide them with a stimulating work environment that leads to their professional and personal development. As a responsible actor in the community, in addition to independently initiating projects aimed at the welfare of the community, we are also involved in initiatives of wider social importance. Our priorities in this segment of activity are support for innovations and entrepreneurship, sports, preservation of cultural and historical heritage, contribution to financial education, and assistance to the local community, especially to the most vulnerable social groups. 

Through membership in local networks that promote sustainability as a healthy and desirable business model, we exchange best business practices and launch new initiatives. Our pioneering initiative, "Together for stronger solidary society", is dedicated to creating a single Register of Civil Society Organizations, which the Bank exempts from commissions when humanitarian donations are paid to their special-purpose accounts. The objective of our oasis, OTP Village, is to connect our employees and partners more with nature and help biodiversity by growing bees and honey plants. OTP landmark project Generator Zero experienced another cycle committed to innovations for reducing carbon footprint, which was followed by the fourth social entrepreneurship fair, the Generator of Good Deeds. 

We have launched the 3rd literary competition for the first unpublished novel with the BOOKA publishing house, while the global initiative partnership "Priceless Planet Coalition'' by Mastercard, the aim of which is to reforest endangered areas of the planet, was renewed for the third consecutive year with 46,885 of our clients taking part in. We remained the official bank of the Olympic Committee of Serbia in the sixth Olympic cycle, as well as faithful institutional partners of the Gallery of Matica Srpska. We are proud of the substantial donations we are giving all year round and the volunteer actions of our employees. In the spirit of responsible corporate governance, OTP Banka has guidelines that ensure that the Bank's operations are in accordance with internationally recognised rules and standards of corporate governance and that the public disclosure of data on its management and operations makes it a transparent and verifiable company.