Sarajevo, Bosnia and Herzegovina, September 21, 2023—A new cooperation agreement between IFC and the Banking Association of Bosnia and Herzegovina (UBBiH) aims to enhance the environmental, social, and corporate governance (ESG) capacities of the country's banking sector.
The agreement aims to provide the banking sector with an integrated ESG approach addressing critical topics—including effective environmental and social (E&S) risk management, climate governance, disclosure, and sustainability reporting—by sharing best practices based on IFC's internationally recognized methodology.
"This collaboration will greatly benefit our member banks, as ESG standards, which guide corporate policies to align with sustainable development concepts in the environmental field, are also highly relevant to banks," said Samir Mustafić, president of the Banking Association of Bosnia and Herzegovina. "Banking supervisors are currently introducing new regulations, and it is crucial to stay updated with the latest trends when it comes to transitioning to a greener future."
ESG risks can be a stumbling block for private sector investment in developing countries because of increasing scrutiny from international investors and new regulatory requirements, especially the EU. IFC`s work with UBBiH aims to address this challenge, helping the country's banks better manage risks and pursue more sustainable business opportunities.
"Strengthening ESG capacity and E&S risk management is critical for the banking industry," said Nicolas Marquier, IFC Manager for the Western Balkans. "By doing that, we streamline investments in projects and organizations with socially and environmentally sustainable development outcomes and increase green, climate-friendly finance products."
The agreement also aligns with IFC's larger goal of encouraging sustainable and responsible investment in developing economies, adding a vital regional component to its integrated ESG program in Europe and Central Asia, in partnership with the State Secretariat for Economic Affairs of Switzerland SECO.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About SECO
The State Secretariat for Economic Affairs (SECO) implements Switzerland's economic and trade policy measures for the benefit of developing countries. It coordinates its activities with the Swiss Agency for Development and Cooperation (SDC) and the Peace and Human Rights Division (PHRD) of the FDFA. The three administrative offices implement Switzerland's international cooperation together. For more information, visit www.seco-cooperation.ch.
About the Banking Association of Bosnia and Herzegovina
The Banking Association of BiH (UBBiH) is a representative, professional organization that represents and advocates the interests of its member banks in relations with the authorities and institutions in BiH. The basic mission of UBBiH is to strengthen trust in the banking sector, which can be achieved with the help of members of UBBiH, domestic institutions, media, adequate education, and the establishment of cooperation with similar associations abroad. All banks operating on the territory of Bosnia and Herzegovina (including the development banks of FBiH and RS) are members of the Banking Association of BiH. For more information, visit www.ubbih.ba.
