Banks’ Capital Requirements in Terms of Implementation of the Concept of Sustainable Finance

Abstract

In 2015, the governments of 193 United Nations member states adopted the 2030 Agenda for Sustainable Development, followed by the Paris Agreement. Their detailed solutions assume the inclusion of the concept of sustainable finance into investment decision-making processes, including directing capital towards sustainable investments and stopping climate change. The main subject of the study is sustainable finance, which is one of the pillars of the sustainable development of the global economy, which has also become an important objective of the European Union, enshrined in the Treaty of Lisbon. The main aim of the paper is an extrapolation of risks appearing in the unstable environment of credit institutions, which are increasingly boldly directing their expectations on their inclusion in the sustainable finance concept implementation. The empirical research included in the first stage a questionnaire survey, while in the second one, a quantitative comparative analysis. The research was aimed at verifying the research hypothesis stating that after the global financial crisis, banks meet the new prudential capital regulations, however by their inclusion in the concept of green finance, they will increase a share of mitigation in the bank risk management strategy. The research, carried out in the Polish banking sector, has shown that domestic banks meet all prudential requirements resulting from the new capital norms. However, investment strategies, based on the composition of the portfolio in accordance with the principles of sustainable finance and on high rates of return in the long term, will change banks’ resilience to key risks from the perspective of sustainable development.

Responsible Lending Policy of Green Investments in the Energy Sector in Poland

“…Nevertheless, this trend is slowly being reversed towards supporting investments in the area of modern, environmentally friendly energy solutions. This means that banking institutions in Poland are aware of a need for rapid changes and their inclusion in the systemic (comprehensive, holistic) approach of all EU actions and policies to build a green deal, which-apart from sustainable finance-also includes climate, environmental, energy, transport, industrial, and agricultural policies [26]. Therefore, increasing banks' awareness seems to be an important prerequisite for further energy transformation in Poland, financed by a domestic banking sector.…”

“…Meanwhile, in the European Union, wherein Poland is already a long-standing member, the concept of sustainable finance in practice means the obligation of its implementation by European institutions and governments, all countries, societies, as well as enterprises and organizations [26]. Therefore, the importance in the EU environment concretization of this concept, based on the Paris Agreement of 2015, is an unquestionable obligation for the Polish authorities to implement it.…”

“…The adopted new regulations hastily passed into the sphere of evaluation of specific solutions for green financing of climate investments, fostering the revival of the discussion and exposition of problems related to sustainable finance [26]. Financial challenges are especially related to climate change which Poland will face in the next 30 years and are estimated at hundreds of billions of Polish zlotys.…”

Assessment of the Impact of Commercial Banks’ Operating Activities on the Natural Environment by Use of Cluster Analysis

“…The possible regulatory effects of the achieved results are also worth mentioning. So far, only the inclusion of climate risk associated with a credit exposure in the determinant list of the capital requirement has been considered (Pyka and Noco ń 2021). The quantification of the direct (operational) environmental impact of a bank as proposed in this article could serve as a basis for determining an adjustment factor for the capital requirement or the level of the bank levy.…”

Planning resource allocation for husbandry management by portfolio optimization

“…But risk management is an important part of increasing the profit. Decreasing the risk is a prerequisite for sustainable financial management and investment decision-making ( Pyka and Nocoń, 2021 ). The husbandry management has to follow simultaneous minimization of the risk and maximization of the return from the husbandry production.…”