The FINANCIAL -- Interview with Ketevan Kekelashvili, Head of the Environmental Management Unit at ProCredit Bank
Q. Last year ProCredit Bank Georgia was recognised as the most sustainable and environmentally friendly bank in Georgia, has anything changed since then?
A. As part of the German based ProCredit Group we continue to focus mainly on providing financial services to small and medium-sized businesses with long-term business plans. We offer our customers innovative, modern, and convenient banking services and strive to be a reliable business partner, promoting long-term partnerships in line with our “Hausbank” concept. At the same time, we continue to develop our sustainable approach to finance, meaning to shape our business model to support our clients and employees in their development, and simultaneously ensure a positive environmental, social and economic impact.
At this point I would also like to highlight that in the beginning of this year we published our first group wide impact report, reporting on the non financial aspects of our approach to sustainable banking. The report is based on the international standard for sustainability reporting GRI (Global Reporting Initiative) and we strongly recommend your readers take a look at it under: https://www.procredit-holding.com/about-us/business-ethics-and-environmental-standards/
Q. ProCredit Bank is the only bank in Georgia that has an Environmental Management System. Can you tell us any more details about this?
A. In line with our group wide approach to sustainable finance, we have developed and implemented a comprehensive environmental management system, which helps us to monitor our performance, set clear goals and allows us to continuously improve this approach.
Therefore also in ProCredit Bank Georgia we continuously strive to minimize our own impact on the environment by closely monitoring our resource consumption. Moreover, we do not finance activities that are harmful to the environment and society, and actively encourage our clients to be more environmentally friendly by supporting them to invest in modern facilities, making them more competitive and more environmentally friendly at the same time.
It is also important to mention that our EMS follows international best practices. As mentioned before, our non-financial reporting follows the international most developed framework for sustainability reporting GRI and our EMS is certified under the international standard – ISO 14001:2015.
Q. What are your main achievements of 2017 /2018?
A. We are proud to say that we have been successfully continuing to finance the environmentally friendly investments of our clients in the last year as well. Our green loan portfolio consisting of investments in energy efficiency, renewable energies and other environmentally friendly projects steadily continued to grow throughout the last year and is expected to grow further in the future. As of the end of 2017, already 13.3% of the ProCredit Bank Georgia’s total loan portfolio was allocated to “Green” loans. We have an expectation that by 2018 this share will increase up to 15%.
Moreover, in line with our goal to promote environmentally friendly investments among our clients, we also try to be a good role model ourselves. Therefore, we are proud to say that our overall efforts to reduce our internal resource consumption has been very fruitful and in 2017 alone our electricity consumption decreased by 24%. We consume 19% less water, 12% less printing paper per employee, and 20% less fuel compared to the previous year. All our measures to protect the environment and prevent climate change led to 19% less CO2 emissions in comparison to the previous year.
We also expect to continuously improve these figures, for example with our recent investments in rainwater harvesting and upcoming solar photovoltaic for our head office in Tbilisi.
After analyzing our water consumption in the head office, we understood that 50% of consumed water was being issued for toilet flushes. Therefore, in order to reduce our fresh water consumption, we installed a rainwater harvesting system where rainwater from the roof and impermeable areas is collected, filtered, treated in a proper way before being introduced into the water supply of the building. The system functions automatically and does not need manual work on a regular basis. The rain catchment area is 2000 m2 and annual rainwater usage is estimated at ca. 1000 m3.
Moreover, by the end of 2018 we will install a Solar PV system on our roof with a capacity of 80 kW which will save 155458 kWh annually. Additionally, a charger for E-cars in front of our Head Office will provide our clients and others with the possibility to charge their electric cars there.
Q. Your fleet of cars consists of electric cars as well doesn’t it?
A. Yes, you are right. Out of our total car fleet 39% are electric and hybrid vehicles. This share will increase in the future. By the end of 2020 all vehicles of Pro Credit Bank Georgia will be electric. Promotion of the purchase of electric and hybrid cars is an important part of our Green Lending Strategy. Investment in e-cars is relevant not only for private individuals, but also for businesses to efficiently manage their logistical expenses.
Q. How do you approach the effects of environmental and social aspects on your client?
A. We are aware that impacts arising from our clients’ operations are very important. The Georgian market, similar to other developing countries with transition economies, is characterized by businesses with a low degree of environmental and social awareness. While financing SMEs we engage with our clients in dialogue to discuss how our services can help to improve their environmental and social performance, increase their resource efficiency and sustainability.
Practically, this means that in our day to day lending operations we promote environmentally and socially sound investments of our clients. We closely monitor the environmental and social performance of our clients and wherever there is an opportunity, we initiate direct discussions with our clients and together find ways in which our clients can modernize their business and be more environmentally and socially responsible at the same time. Moreover, we screen all new potential clients against our Exclusion List, which strictly forbids financing or even establishing business relationships with anyone who is engaged in environmentally and socially harmful activities.
Q. You mentioned Green Finance and the Green Loan Portfolio, can you tell us more about them?
A. We are encouraging our clients to take a green approach to their businesses. For this purpose, we have implemented Green Finance for businesses and private clients. In particular, Green loan is investment in:
• Energy-efficient equipment and processes (EE), e.g. Thermal insulation of the building envelope; space heating, cooling and ventilation; efficient production machinery and equipment, etc.
• Renewable energy technologies (RE), e.g. Solar water heating systems; a photovoltaic system; hydro-power plants; wind power systems.
• Environmentally friendly projects with a direct positive impact on the environment (Gr), e.g. Soil, air, water protection measures; waste management; organic agriculture; environmental licensing/certification, etc.
We wish to accelerate investment in green lending among our clients because from a business perspective it leads to better quality products and services, more efficient use of energy and resources, reduced costs and increased competitiveness. As mentioned before, as of the end of 2017, already 13.3% of ProCredit Bank Georgia’s loan portfolio was allocated to “Green” loans. We have an expectation that by 2018 the share will increase up to 15%.
Q. What is the main challenge ProCredit Bank is facing at present in the field of Green Finance?
A. One of the main challenges in this field is the low level of awareness about environmental issues and protection, thus initiatives and suggestions of investments in environmentally friendly measures and technologies come more from the bank’s side rather than from business or private individuals. Also gaps in legal framework in this area need to be dealt with, starting from the development and enforcement of a Building Code and ending in environmental regulations.
Either way, already now, more and more clients are very aware about environmental and social concerns and choose to be ahead of the regulations and we are very glad to be able to support them in regard to their banking needs.
In the future we hope that more and more businesses in Georgia will follow these examples, choosing to take actions themselves, and we are ready to support them with their banking needs.