25 February 2019

The MNB launches a Green Program to support financial services in Hungary aiming at the preservation of the environment and to contribute to reducing financial institutions’ and its own ecological footprint. Furthermore, the Bank will establish an award for financial institutions doing most to promote green finance. The Bank joined the Central Banks and Supervisors Network for Greening the Financial System (NGFS) in January.

The Magyar Nemzeti Bank (MNB) is announcing a Green Program to reduce the risks associated with climate change and other environmental problems, to expand green financial services in Hungary, to widen the related knowledge base in Hungary and abroad, and to reduce financial market participants’ and its own ecological footprint. The Program consists of three pillars: the various initiatives include elements about (i) the entire financial sector, (ii) the development of the MNB’s social and international relations and (iii) the further greening of its own day-to-day operations.

Under the first pillar of the Program, the MNB as a supervisory authority will conduct impact assessments based on various scenarios on the potential effects on financial markets of climate change and the transition towards a climate-friendly economy, which remain largely undetected to this day. Based on the analyses, the MNB will provide guidance to financial institutions, if necessary, by issuing recommendations in order to reduce existing risks.

The Bank will also encourage the greening of Hungarian financial institutions and their products. To this end, the MNB will soon announce a competition for supervised institutions to win this year’s Green Finance Award. The applicant market participants will be asked to present their past and future actions taken to address environmental issues, the transparency of such actions as well as their own financial products, services or other decisions made to attain green goals. The MNB will publicly announce its decision to make the ‘Winner of Green Finance Award 2019’ for the first time this year.

Under the second pillar of the Green Program, the Bank will play a role in developing education and the dissemination of information related to climate-friendly finance. In line with the recommendation of the Financial Stability Board grouping together the central banks of the G20, the EU’s financial sustainability package and the second National Climate Change Strategy adopted by Hungarian Parliament last autumn, the MNB will also actively take part in the work of domestic and international forums on reducing environmental risks by financial resources.

As the first Central and Eastern European participant, the Bank in January 2019 joined the Network for Greening the Financial System (NGFS), an international organisation established to green the financial system. The NGFS was established by several of the world’s leading central banks more than a year ago to promote funding and investment programmes aiming at environmental sustainability and to map out the effects of risks associated with the climate change.

Under the third pillar of the Program, the MNB will take measures to further reduce its own ecological footprint, and will improve its own transparency in terms of environmental considerations. Currently, the Bank operates a developed, externally audited eco-management and audit scheme; however, in the future it will also seek to acquire, and continuously maintain, the Green Office certification. Detailed information on the Green Program is available at the following link.

Magyar Nemzeti Bank