The FINANCIAL -- The eco-loan portfolio of ProCredit Bank Georgia is projected to reach USD 45 million by 2015. The Bank wants to find clients who care about the environment, and rejects financing projects that have a negative impact on the environment. Having energy efficient headquarters, recycling waste, electronic signatures, hybrid cars - is but a small list of the activities that combine to support the environmentally responsible image of ProCredit Bank Georgia.
“I absolutely think that ProCredit Bank can be an example to others. We have a lot of visitors that come to our head office. We even offer them tours, where we show and explain which other types of technologies we have implemented. We try to convince them to implement similar technologies in their own businesses. In many cases it works,” Asmus Rotne, General Director at ProCredit Bank Georgia, told The FINANCIAL.
Q. ProCredit Bank is the only bank in Georgia that has an Environmental Management Unit (EMU). Tell us in more detail please, which important projects have been implemented by this unit?
A. The Environmental Management Unit works in three different directions. We call them the three pillars of environmental management. The first pillar is that we simply want to optimize the use of energy and resources. Every company that uses energy and resources produces some waste. For this we have established a system of collecting information and monitoring the use of energy and resources, and identifying areas where we can improve our performance. We establish an action plan and undertake several projects of technical changes and investments in our premises as well as raising staff awareness to optimize the use of energy and resources. One of the most important projects we completed last year was the construction of our new head office. Here we tried to use a lot of modern technologies that are less resource-intensive. The second thing that we have been investing in most lately is cars. We started to switch to electric cars and hybrid cars that significantly reduce resource consumption. It is important that they contribute to reducing air pollution in Tbilisi, which is a huge problem as well. Another substantial impact that we as a bank, as an organization, have on the environment, is through our paper consumption. This is something that we have been working on intensively in the last couple of years. We have been working to reduce the amount of paper that we go through. We do it in different ways. Some documents we simply keep now only electronically. We have revised our internal process and procedures to establish the necessity of having information on printed paper. Now we have a centralized printing system. So, our employees do not have printers in their offices anymore. This helps to change people’s mentality. They think twice about whether they really need to print something or whether they can just read it on screen instead. Paper consumption has been reduced by 60% in total, and by 41% per employee. The paper waste we do produce we try to recycle. We have started cooperating with Coop Georgia, the company offering recycling services in Georgia.
Pillar 2 has to do with our external impact on the environment through our banking business and supporting our clients, which has to do more directly with the business we do, the banking business. That is where we are looking at the social and environmental risk of the companies/client that we finance. It is also an opportunity for us to identify potential green loans that are aimed at environmental performance improvement. In some cases we do not finance certain investments, not because of the financial situation of the company, but due to the character of the business and management practices that have a negative impact on the environment and society.
ProCredit Bank supports the development of many green projects in Georgia. Issuing green loans is the third pillar of our environmental management. We have some interesting clients, which you see on our billboards, who produce energy-efficient and environmentally friendly materials. We try to find clients who also care about the environment.
Q. The new head office of ProCredit Bank is energy efficient. Can you tell us from your experience how important energy efficiency is, and what its impact on the environment and your business is, in terms of cost efficiency?
A. Our energy cost saving per square meter is 25% in comparison with the old building. It is quite a reasonable figure and in many cases you can achieve even bigger reductions in your energy consumption. We are actually still continuing to look at ways in which we can improve even our head office to make it more efficient. We are discussing ways to reduce energy consumption for heating and cooling by blocking sunlight during the summer. We are discussing new investments in lighting improvement and even more environmentally friendly technologies. We will continue to invest in energy efficient measures and also roll it out in our branches.
Low awareness is a problem, and is the reason why people think that energy efficient systems are more expensive. There are so many fancy new technologies that are not very efficient. Implementing solar panels and photovoltaic systems for electricity production can be cost-efficient with a proper approach and feed-in tariff support from the Government, as we also finance these measures with green loans. However, there are basic things that really make a lot of sense, both financially and environmentally. In our head office we have proper insulation of the walls, which is not very common. Most of the constructions in Georgia are done with a normal, standard single block, without any insulation. It is cheap and fast. However, in winter it gets very cold and in summer - very hot. So, owners need to spend a lot afterwards on heating and cooling. People simply do not think it through before they invest. If they would really try to calculate the costs, they would get very substantial potential savings. Thinking further ahead is important.
Q. The EMU plays an important role in raising the environmental awareness of staff, clients and the general public. What are the results of your activities and can we say that your target audience is more environmentally friendly today than before?
A. Awareness in increasing. However, we have to be realistic that it is a very long process. Just like it was in Western Europe. It probably started in the 1970s; then it slowly began to become mainstream in the 1980s and 1990s. After 20 years of its implementation, everybody was talking about green issues. In Georgia it is at the most basic stage. First of all we constantly receive positive feedback from our employees, and our clients are becoming more and more interested in the topic. In the beginning they just thought it was a trick to save money. After we really talked to them for a long time, they started to understand. Now we have started to invest in new cars, with hybrid engines. People have realized that these cars are actually more expensive than cars with gasoline engines. So, they have really understood that it was a very serious effort and investment made to reduce our fuel consumption. We now see that people are trying to drive in a more careful way. They are thinking about how to reduce their auto expenses. We see that people are beginning to bring their own plastic and glass bottles here, where we have recycling containers. So, little by little people are getting more interested. However, it is a long process. It will take ten or twenty years before we have a really good level of awareness among the population.
We started issuing eco-loans in 2012. By the end of 2013 the portfolio of eco-loans amounted to USD 10 million. By the end of 2014 the sum was USD 18 million. We see that the demand is increasing from year to year. As of April 2015, the eco-loan portfolio amounted to USD 25 million. We plan to reach 10% of the total loan portfolio by the end of this year. It should be approximately USD 45 million.
Q. Foreign companies operating in Georgia remain the main initiators of environment protection. What are the reasons for it?
A. I think it is because it is a long process. We started discussing these things when I was a child in the 1970s. Environment protection has been a discussion for the whole of society for around thirty years. Accordingly, now it is a natural thing for Western companies; one of the things that we know that we must always think about. It will also come to Georgian companies, but it will take a little bit longer.
Q. What negative impact might climate change have on Georgian businesses?
A. Georgia is not really considering enough what the impact of it might be. Climate change will have an impact. It is not only low-lying countries that are affected by flooding due to rising water levels. This could be a problem for some parts of Western Georgia. But it is also about the crop yield that will change if it gets warmer by even a couple of degrees. Ultimately as a result of global warming, we might have some conventional types of crops which produce lower yields. So, the whole natural environment is changing for Georgia. That should be taken very seriously. Tourism and agriculture, including wine, are the most successful and promising business directions in Georgia. Both of them greatly depend on the environment. Therefore it is very important for Georgia to be protective of this. Cars and traffic are a significant element in this. Most people drive very old cars with high levels of greenhouse gases being emitted. That is both private cars and public transport. So, these are areas in which more should be invested.
Q. What will be the main challenges for Georgia in terms of the environment?
A. It is about the long-term perspective. There are lots of positive things happening. As I am aware, the Municipality of Tbilisi wants to purchase new, natural gas-powered public buses. It is a great initiative and I hope that they will really push for it and manage to implement it. Another good thing that is happening is the recycling company Coop Georgia. They do a lot of work in public schools. They are integrating into the school curriculum. The impact is probably only small. However, the impact of awareness raising is something we will see over the next twenty years. The biggest challenge is to not let the current priorities drown out these long term environmental priorities. If we look at the current priorities of the Government, it is getting ready for the next elections and avoiding taking unpopular decisions before the next elections. It is fighting the economic crisis that is building up in the country. So, the challenge is how to continue with these green priorities and not step away from them because of some short-term priorities.
Q. Can you give any suggestions on how one can become more environmentally friendly?
A. Reduce, reuse, recycle! Take into account that there is a public place to take your waste to - the Hippodrome territory, in Tbilisi. After I started doing it myself I realized that I am only throwing away half as much stuff as before. The second thing that is really worth thinking about is transportation. If you are buying a car, think twice about whether you really need it. And then if you have to buy a car, do you really need one with a 2.5 engine or can you get something that is less polluting. You will spend a bit more, but later, in the long term, it will help you to save much more.