№ 8/2022

Fìnansi Ukr. 2022 (8): 90–117https://doi.org/10.33763/finukr2022.08.090

MONETARY POLICY

BORTNIKOV Gennadiy ¹

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0001-8388-6721

State regulation with regard to disclosure of information by banks on sustainable finances

Introduction. Disclosure of information on sustainable finances and environmental, social and corporate risks is becoming a norm of banking practice in the world, Ukrainian banks are gradually joining this process. Access to information about activities in the field of sustainable finance is crucial for investors to decide whether to provide appropriate resources.
Problem Statement. Lack of unification and verification of the reliability of data on the activities of Ukrainian banks in the direction of realizing the goals of sustainable development.
The purpose is to generalize key innovations in the global banking community regarding public disclosure of information on sustainable finances.
Methods. Common scientific methods were used in the research process: structural and systemic analysis, synthesis, grouping, comparison, theoretical generalization and abstraction.
Results. The basic structure of the annual report on sustainable financing of the bank should include four sections (business responsibility, social sphere, environment, corporate structure), in compliance with the principles of proper disclosure of information, and the detailing can be done by a specific bank. The reports of Ukrainian banks, which contain information on sustainable financing, do not fully correspond to the best global practice. The main shortcomings of these reports are declarative, with gaps in setting target indicators, lack of independent assessment, focus on environmental aspects. In addition, there is imperfect, incomplete or outdated information base on climate finance and ecology in Ukraine; the legal framework of sustainable finance needs to be harmonized with European standards, taking into account national specifics. All these aspects complicate the comparative analysis. In the countries of the European Union, a system of reporting on the risks of non-compliance with environmental, social and management standards (so-called ESG risks) has been introduced. In developing reporting standards, the National Bank should pay attention to the principles of effective information disclosure developed by the TCFD expert group.
Conclusions. It is appropriate to introduce the publication of annual reports of state banks on sustainable financing in a unified format starting in 2023. The report on stable finances must be confirmed by an independent assessment (verification) to prevent data manipulation. Audit companies and rating agencies can act as independent evaluators. Even in the conditions of martial law, the global Sustainable Development Goals are not excluded from the agenda, on the contrary, they acquire special importance, especially the social aspects. The NBU could play a decisive role in the unification of approaches and ensuring the reliability of data. Martial law cannot be the reason for banks and the regulator to neglect issues of reliability and completeness of reporting.

Keywords:sustainable finance, banks, banking regulation, information disclosure, sustainable development

JEL: G21, G28, G32

Bortnikov G. . State regulation with regard to disclosure of information by banks on sustainable finances / G. . Bortnikov // Фінанси України. - 2022. - № 8. - C. 90-117.

Article original in Ukrainian (pp. 90 - 117)

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