Case study: How Hipotekarna Banka works with its clients and customers to encourage sustainable practices
Hipotekarna Banka, a Montenegrin-registered bank with 21 branches solely within Montenegro and no parent company, focuses its business model on three key revenue streams: corporate and retail client services, alongside investment banking. This core business, coupled with steady growth, has established a strong competitive position, making it a leading and systemically important bank in the Montenegrin market. Hipotekarna Banka is a signatory of the Principles for Responsible Banking (PRB) and is, accordingly, working with its clients and customers to encourage sustainable practices and enable sustainable economic activities. Tweet This!
This case study is based on the 2023 PRB Reporting and Self-Assessment Template by Hipotekarna Banka, prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Which Principles for Responsible Banking have been addressed?
The Principles for Responsible Banking addressed in this case are:
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- Principle 3: Clients and Customers
- Principle 4: Stakeholders
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- How Hipotekarna Banka proceeded with stakeholder identification and consultation, and
- How Hipotekarna Banka worked with its clients and customers to encourage sustainable practices and enable sustainable economic activities
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Stakeholder identification and consultation
Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.
Hipotekarna Banka conducted a materiality assessment through collaborative engagement with diverse stakeholders to gain a comprehensive understanding of key issues and inform action plans. These stakeholders included a corporate client, a retail client, two shareholders, the Central Bank of Montenegro, two media outlets, two employees (a manager and a client-facing representative), and a banking partner.
Each stakeholder group offered unique perspectives, contributing vital insights into challenges and opportunities related to implementing the Principles. Consultations addressed various concerns, yielding concrete results and influencing the bank’s action planning. This collaborative approach has been essential in developing strategies to enhance impacts and align with the Principles.
Furthermore, the bank proactively engaged 20 corporate clients by distributing an ESG investigation questionnaire, a pioneering initiative aimed at fully integrating ESG information for all Hipotekarna Banka clients. The goal is to create a framework for applying tailored policies based on individual ESG scores, encouraging clients to adopt more responsible business practices and fostering a positive impact on corporate behavior and overall sustainability. This forward-thinking project highlights the bank’s commitment to responsible banking practices and a more sustainable and ethical business environment.
How did Hipotekarna Banka work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?
In its 2023 PRB Reporting and Self-Assessment Template Hipotekarna Banka reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:
In 2023, Hipotekarna Banka launched an engagement process with 20 corporate clients across various sectors, utilizing a comprehensive questionnaire to assess their ESG practices and transparency. The bank aimed to implement a robust client assessment system, incorporating ESG metrics and thresholds by the end of 2024, to offer more favourable interest rates to companies demonstrating strong ESG performance and contribute to reducing the impact of financed emissions.
Furthermore, the bank has introduced green products for all customers to support their transition, including:
- The GGF credit line, which facilitates financing for energy-efficient construction and green mortgages.
- The EED program, launched in 2020, which focuses on subsidizing interest rates and loan processing fees for households. With a budget of approximately €800,000, the program offers interest-free loans for implementing energy efficiency measures.
UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet
With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.
FBRH Principles for Responsible Banking (PRB) Assurance:
First class PRB assurance services: The result of solid, hands-on ESG/ Sustainability experience
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- FBRH is a GRI Certified Training Partner (Global), ISEP Training Centre and a member of CPD.
- FBRH builds trust. Over 200 reviews from top professionals from around the world demonstrate our ability to build strong, trusting business relationships.
- FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.
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The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.
References:
This case study is based on published information by Hipotekarna Banka, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://www.hipotekarnabanka.com/en/reports/sustainability–impact-report
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