How Can Open Data Help Banks Become Greener?
How Can Open Data Help Banks Become Greener?

Author(s): Virginia Zhelyazkova, Dafinka Lazarova
Subject(s): Politics / Political Sciences, Politics, Law, Constitution, Jurisprudence, Environmental and Energy policy, Commercial Law
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: open banking; environmental risk management; green bank, ESG; regulatory developments
Summary/Abstract: This report summarizes the vital role of open banking in advancing environmental risk management and the green banking concept within the European financial landscape. The text delves into the evolving regulatory framework emphasizing sustainability and the pressure on financial institutions, particularly banks, to adapt to these changes. It discusses how banks are increasingly accountable for the environmental, social, and governance (ESG) performance of their lending portfolios and the challenges they face, especially regarding insufficient customer ESG data. The solution offered by open banking is highlighted, demonstrating its potential to bridge information gaps, thereby aiding banks in identifying and promoting 'green' activities and managing ESG risks effectively. The concept of a green bank is explored, defining it as an entity with a focused commitment to financing sustainable activities. The text finishes by highlighting the transformative potential of open banking in aligning bank operations with ESG goals, enhancing regulatory compliance, and fostering the development of environmentally friendly banking products and services.

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