Development trends in ESG banking activities

Abstract

Aim. The presented study aims to identify trends and directions that characterize the participation of banks in the implementation of the principles of sustainable development at the current stage and to formulate recommendations for enhancing the role of banks in this process. Tasks. The authors determine the role of commercial banks in the implementation of ESG projects; analyze the elements of sustainable development from the perspective of commercial banking activities; identify trends in the operation of banks and provide recommendations for enhancing their participation in the implementation of sustainable development projects. Methods. This study uses general scientific methods, including a systems approach to the analysis of the subject, a conceptual approach based on the analysis of papers by Russian scientists on sustainable finance, as well as logical and statistical analysis. Results. The conducted study substantiates the key role of banks as entities actively involved in the implementation of projects aimed at achieving sustainable development goals; describes the specific manifestation aspects of each of the three ESG elements from the perspective of commercial banking activities; identifies and describes major trends in the activities of banks associated with the implementation of ESG projects; formulates recommendations for banks on how to enhance this activity. Conclusions. The special status of banks as financial intermediaries does not allow them to remain uninvolved in the implementation of ESG projects. However, a complete understanding of the importance and urgency of implementing the ESG agenda in the banking sector is yet to be achieved. Factors slowing down the development include poor quality and limited sources of information for analyzing borrowers and issuers, lack of a unified methodology for assessing the participation of banks, and insufficient development of the regulatory framework for analyzing ESG projects. These factors can be mitigated by developing universal standards and approaches to the assessment of relevant projects, creating a unified taxonomy aimed at regulating all aspects of ESG banking, and spreading information about sustainable development.