The MBA’s Secretary General, Karol Gabarretta, and D/Chair of the MBA’s Standing Committee on ESG, Sustainability and Economic Growth, Glenn Bugeja (HSBC) participated in the 2023 edition of the Central Bank of Malta’s Forum for Financial Stability held on the 6th December 2023. The MBA’s participants delivered a presentation focusing on the industry’s views as part of the session entitled Banks’ Journey towards ESG Compliance – the MBA’s perspective.
Mr Gabarretta and Mr Bugeja addressed some of the key issues and concerns faced by banks through the implementation of the significant and challenging requirements imposed on the industry by policymakers as part of the drive towards a net zero target in 2050. The MBA’s participants spoke amongst others, on: the lack of robust data from clients which are required by banks to cater for the granular disclosure of their exposures to potential agents of climate change; the drive also engenders a very complex and challenging process of transformation and transition which is a reality not only for banks but also for regulators/supervisors and other relevant competent authorities; the result is a multi-faceted environment whereby banks have to align the very rigorous prudential framework imposed on them (through changes to systems; training; specialisation; etc.) with the challenges in the transformation of their business models to the new realities; the, as yet, unknown impact on the real economy and implications arising thereof, had banks to adopt a prescriptive approach solely to improve their Green Asset Ratio (GAR); and other questions arising from the fact that at the same time this process of transformation is happening, banks will also be facing a deluge of new prudential and other requirements in the next months and years.