Bank of Ireland has raised EUR 750 million to fund sustainable projects through its second green bond issuance of 2023. The funding raised will finance clean transportation, renewable energy, and green buildings.

Bank of Ireland has issued EUR 1.5 billion in bonds through its Green Bond Framework so far in 2023, bringing the total issuances to date to EUR 4 billion. Facilitating green finance Bank of Ireland is one of the first Irish banks to set scientifically-validated targets for reducing greenhouse gas emissions, covering 76% of the loan book and all of the Group’s own operations. In this context, it has also published a target to grow sustainability-related lending on its balance sheet from EUR 8 billion in 2022 to EUR 15 billion in 2025 and EUR 30 billion by 2030.

Green mortgages now account for half of the Bank’s new Irish mortgage lending. The bank’s officials said they are committed to working with customers, colleagues, and communities to support their transition to a resilient, net zero economy by 2050, in line with the Irish and UK governments’ ambitions and targets. They have made good progress to date in supporting green loans and mortgages for customers and in transforming their own operations and reducing their carbon footprint.

The bank’s focus remains on providing highly practical and useful solutions and supports that help Ireland move to a low-carbon future. More eco-friendly initiatives In June 2023, UK-based Finastra and the association in climate transition Green RWA have launched the Climate-Extended Risk Model (CERM) Sandbox. The new platform offers an interactive and immersive experience for banks to understand and manage climate risks in a simple and accessible manner.

The CERM lies at the core of the Sandbox, designed to increase financial resilience in the face of climate change. The climate risk management framework comprises two main components: physical and transition risks. By integrating this into the existing capital framework, the solution extends the current credit risk model used by banks, providing a comprehensive approach for identifying long-term, global, and evolving climate risks and enabling more accurate calculations of potential losses.

Officials from Green RWA said that by launching the CERM Sandbox, they aim to provide the finance industry with a comprehensive approach to understanding and managing climate-related financial risks at a high level. This is an achievement, in line with Green RWA's goal to support energy transition financing. In a The Paypers interview, heads from MUFG Bank shared their views on sustainable banking and where to find it.

Sustainability continues to accelerate in terms of its importance and level of priority to banks and their clients. It was important as a ‘pillar’ within a corporate or bank strategy a few years ago but now it has moved to being an integral part of every business strategy. When a bank looks at incorporating sustainability into its principles and practices it looks at three broad areas: strategy, operational effectiveness, and regulatory compliance & reporting.

In the interview, it is further noted that the focus is on multiple perspectives in relation to ESG (Environmental, Social, and Governance) considerations. Strategically, the emphasis is on achieving net-zero commitments, expanding the ESG-connected product range, integrating ESG into the operating model, and engaging with clients on their transition strategies. Operationally, ESG is taken into account during product development, including processes, systems, controls, and functional decision-making.

From a regulatory/compliance standpoint, there is a need to understand current regulations, future requirements, and the measurement, reporting, and disclosure of both financial and non-financial information. .