"Banks are Leading in Green Business"

"Banks are Leading in Green Business"

The FINANCIAL -- Interview with Boris Kiknadze, Head of CSR at Bank of Georgia

Q. Can you evaluate the overall ‘green business’ situation in Georgia?

A. When we talk about the overall situation in Georgia, especially in the green business, we have to mention that it’s a totally new aspect of business ethics and CSR. It will definitely take a few more years to fully establish the right concepts for green business. So I think right now we are in a period of transition where we see companies striving towards new projects which are totally connected to green business. I think the banking sector is also leading in this field and in the future we will see more and more involvement from banks in green business, doing more and more green initiatives.

Q. Can you describe Bank of Georgia’s green initiatives and practices?

A. As Bank of Georgia is a leading bank, we feel a responsibility to be involved in many social aspects. One of them is green initiatives. For instance, in 2008 when there was the war with Russia, BOG was one of the first to decide to bring in a new initiative of green deposits. And with a certain amount from this project we started to plant trees in the territory that had been damaged by the war. Since then BOG has also been using different practices. One of them is using new technologies such as ‘SMS signature’ which completely cut the amount of paper we are now using in our service centres. Besides that, we also finance different initiatives such as green start-ups and social enterprises which are oriented towards renewable energy or recycling. And we must also mention that BOG is a leading partner of the Caucasus Nature Fund which is taking care of all of the protected areas not only in Georgia but in Armenia and Azerbaijan too.

Q. What is the main challenge that BOG is facing at present in the field of green finance?

A. I think that there are a lot of problems in Georgia, especially in the regions, to do with protecting the environment and nature. When we are talking about the main challenges, I think one of them is protecting the existing nature and maintaining the green environment that we have, while another one is raising awareness among the population. If there was more interest in this subject from people then more and more companies would get involved in the process of establishing new initiatives. So, as we are a private company, we are looking for new solutions to challenge those aspects.

Q. Have you researched the main reasons behind Tbilisi’s worsening environmental situation. Can you please name these reasons?

A. As I said, we have internal initiatives and projects dealing with these problems, so of course we did research. One of the main problems we have seen is the number of cars on the roads, which is one of the main reasons for the critical environmental situation in the city. We decided to tackle this issue by introducing the totally new project of employee car sharing. We called it the “GZAD” application, aimed towards connecting our employees to each other. As a result they’re able to give each other lifts, taking them to the office or back home again. With this idea we wanted to reduce the amount of cars that we and our employees are using as well as tackle the problem of parking, which is another big problem, especially in Tbilisi. So by this small initiative we were trying to fix a whole host of problems, such as air pollution, too many cars in the city, parking problems, and of course, to better connect our employees with each other.

Q. What do you think you can do in the short and medium term to add to the field of green business?

A. I think the financial sector, especially the banking sector and Bank of Georgia specifically, is looking towards bringing more and more social enterprises in. We have really good examples of green social enterprises and green start-ups. Every year we host a grant competition, in which we have up to 5 winning projects with each of them receiving GEL 50 000 grant. So I think in the near future BOG will continue investing in social enterprises, and of course one of them is green social start-ups.

Additionally, we have had an internal policy for years already and are working towards energy efficiency and using modern technology to decrease the harm that we are doing. I think this is one of the small examples of things that banks can do.

I also have to mention that last year when there were fires in the Borjomi area BOG gave the biggest contribution out of all Georgian companies towards re-building the new forest of Borjomi and planting trees. So I think if other companies were to also go for this direction we would have a much better situation overall.

Q. How would you define green financing?

A. I think that green financing is totally new in Georgia, it is still making baby steps and will take a few years to totally establish the right concept that we are seeing for example in Europe or the USA. As I have said, BOG was leading in green financing and when we had green deposits, it was the first step forwards. I think nowadays green financing is looking towards establishing environmentally friendly companies, environmentally friendly organizations and NGOs, supporting them and being involved with them. As a CSR component of our company we are partnered with different NGOs, we are a part of different alliances and organizations with whom we are trying to jointly establish some ideas or at least raise awareness not only among our employees but among our customers and people who are using our services.

Q. How has going green helped BOG? Can the experience of BOG in green finance be helpful to other banks in Georgia?

A. I think that in any case, any movement towards green initiatives will be beneficial for any company. For instance, I have mentioned the SMS signature which we introduced in the banking sector a few years ago. It decreased the amount of paper usage in our service centres by up to 65-68%. I think internal polices are really important. When you are trying to evaluate how you are making an impact on society and the environment, at the same time you can also teach your employees how they can save energy, how they can recycle, how they can participate in the establishment of an idea among society and employees.

Q. In your experience how important is energy efficiency?

A. Every year we are trying to bring in new technologies that can help us to reduce the amount of energy and water that we are using. Energy efficiency has a direct link with banks, companies and other entities because they can also reduce the amount of spending they are doing. So if you are establishing new technologies, they might be expensive to a certain extent at the beginning, but in the long run we do believe that small savings on each technology and form of energy can have an impact. It was beneficial for BOG and it is beneficial still. We are continuing to establish new technologies and integrate with our services because we see the value not only in financial terms but also the value of saving the environment and local community.

Q. In terms of the green deposit programme, what have you implemented since 2008?

A. The green deposit was really a pioneer project back in 2008. It was really impactful for the community and for the area that was burned during the war with Russia. We collected volunteers who were willing to help us, employees, customers, and with them we planted trees in that area. Unfortunately last year when we had a fire around this area many of those territories where we planted trees were burned again. That’s why we feel a continued sense of responsibility to take care of those areas and last year we said that one million GEL would be donated to preserve these areas once again. The green deposit was a really good example of how banks and companies can integrate initiatives. These kinds of integrated initiatives can have much more of an impact than one-time projects. That’s why the green deposit initiative brought us a lot of attention from people.

Q. What about the ‘green bag’ initiative? What was the idea behind this service?

A. Green bag was an initiative we began a few years ago. We started with the idea that along with our employees in our service centres we have a lot of paper we are using every day. We therefore started a campaign to introduce our employees to how important it is to recycle paper, and how many trees we can save if we just collect this paper and throw it into special bags. We have collected more than 8 tons of paper since then. Green start-ups have a mission to recycle green bags. So we collect paper for them, then they recycle and use it for different purposes. I think it’s a good example of how a bank can start with just an idea, and introduce it as a way we can save nature.

Q. What is BOG doing to help small businesses compete in today’s market in the field of green finance?

A. I think what we are seeing nowadays on the market is that more and more companies are using modern green technologies oriented towards green business. Mostly, I have to say that it’s still on an NGO or social enterprise level because it’s totally new and there might not be that many profit-oriented initiatives or projects. For instance, we already have companies that are building green buses or establishing electric vehicle charging stations available not only in Tbilisi but in the regions too, and thereby promoting green mobility. BOG is part of the green mobility initiative and we think that more and more such initiatives will come and we are willing to support them when they do.

Q. Can you share one brief story about how the BOG green finance programme is helping Georgian businesses thrive?

A. I think ‘Green Gift’, the company which is taking care of recycling paper, is a really good example. This was an initiative by two young people who wanted to change something in our reality. Years ago we didn’t have any chance to recycle used paper, but nowadays we have really good companies who can take care of such paper, who can recycle and reuse it.

When they came to us with this idea, we were willing to support them and they won one of our grant competitions. We not only gave them the money but also went through all the stages with marketing, PR, helping them to establish an online platform and helping them to sell their product. I think this small case is an example of how one company such as Bank of Georgia can help a small start-up with a fresh initiative to establish a totally new idea in Georgia especially in a green field and how it can slowly transform the current reality. BOG is always open to such ideas which are oriented toward saving our nature and greening the local environment.