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Sustainability
"Just transition": Addressing the social and economic impacts on societies in the race for a climate-resilient economy
“Just transition” is a crucial approach to ensure that the shift towards a low-carbon, climate-resilient economy is fair and inclusive.
Addressing the social and economic impacts on workers, communities, and vulnerable populations becomes essential to raise the awareness among communities on probable unfamiliar and indirect consequences.
Embracing just transition principles is particularly important for cooperative banks as it aligns with their core values and presents an opportunity to support theirmembers and communities through this significant economic transformation.
This SPARK webinar explores the role of cooperative banks in ensuring a fair transition to a low-carbon economy. The discussion highlights the social and economic effects of sustainability shifts, particularly on vulnerable communities, businesses, and financial institutions. The session emphasizes the importance of aligning financial strategies with just transition principles, showcasing case studies and policy recommendations for cooperative banks.
- Just Transition: A framework ensuring that environmental sustainability shifts are fair, inclusive, and socially responsible.
- Extractive Economy: An economic model reliant on resource extraction (e.g., coal, oil) with high environmental and social costs.
- Regenerative Economy: A system that restores and replenishes natural resources, promoting sustainability.
- Circular Economy: A model that minimizes waste by reusing and recycling materials.
- Carbon-Intensive Industries: Sectors such as coal, oil, and gas that produce high carbon emissions.
- Reskilling Programs: Training initiatives to help workers transition into new, sustainable industries.
- Micro-Financing: Small-scale financial services provided to individuals or small businesses, often targeting low-income communities.
- Net Zero Commitment: A pledge to balance carbon emissions by reducing and offsetting carbon output.
- Green Loans: Financial products specifically designed to support environmentally friendly projects.
- Community Resilience Fund: Financial support aimed at strengthening communities’ ability to adapt to economic and environmental changes.
- Sustainability Impact: Cooperative banks play a crucial role in addressing the social and economic effects of sustainability transitions.
- Just Transition Definition: Ensures fairness and inclusivity in the shift to a low-carbon economy, addressing job displacement and social inequalities.
- Financial Risks: Poorly managed transitions can lead to economic instability, loan defaults, and business closures.
- Opportunities for Banks: Financial institutions can develop new products, such as loans for renewable energy and workforce reskilling programs.
- Regulatory Compliance: Businesses face increasing sustainability regulations, impacting supply chains and financial relationships.
- Community Resilience: Cooperative banks can support local economic diversification and provide tailored financial solutions for vulnerable populations.
- Case Study – Indonesia: Transitioning taxi fleets to electric vehicles and financing solar panel installations for households.
- Case Study – Philippines: A cooperative bank funds a biomass energy project, providing farmers with stable income through long-term contracts.
- Policy Integration: Banks must align their policies with Just Transition principles to mitigate risks and create long-term sustainable investments.
- Future Outlook: Emphasis on inclusive finance, job creation, and community-centered renewable energy projects.
This presentation focuses on the role of cooperative banks in supporting a fair and inclusive shift to a low-carbon economy. Led by Lisa from the WEG group, the session explores the challenges and opportunities associated with sustainability transitions, particularly for vulnerable communities, businesses, and financial institutions.
The discussion begins by defining Just Transition as a framework that ensures economic shifts toward sustainability do not disproportionately harm workers and marginalized groups. The transition from carbon-intensive industries can lead to job losses, financial strain, and increased operational costs for businesses. Financial institutions, particularly cooperative banks, play a crucial role in mitigating these risks by providing targeted financial products such as green loans, reskilling funds, and micro-financing.
The webinar highlights the potential financial risks for banks if transitions are not well managed, such as increased loan defaults and economic instability. It also showcases case studies where cooperative banks have successfully financed renewable energy projects, circular economy initiatives, and community-driven sustainability programs.
The session concludes by emphasizing the importance of aligning financial strategies with Just Transition principles. Banks can support businesses and individuals by fostering inclusive finance, job creation, and community-centered renewable energy projects, ensuring a sustainable and equitable future.
- “Just Transition ensures that the low-carbon economy is both equitable and inclusive to people.”
- “If transitions are not managed well, overnight, 300,000 clients could lose their jobs and livelihoods.”
- “Cooperative banks can design financial products tailored to vulnerable communities, including low-income groups, women, and minorities.”
- “One example is an Indonesian cooperative financing solar panel installations for households and small businesses.”
- “A lack of Just Transition planning caused 125 mining companies to go bankrupt in Indonesia in 2015.”
Sustainability as a company's DNA - practical example based on a regional cooperative bank by VOLKSBANK WIEN
After introducing the Association of Volksbanks in Austria the path of implementing sustainability – from paper to reality – will be shown in this SPARK.
This includes the sustainability principles of Volksbank Association in Austria, the process of materiality analysis, communication and how the “Project Sustainability” was built up, successfully completed and the integration of sustainability into all areas and processes of Volksbank Association was reached.
The Role of Renewable Energy Cooperatives in the Climate Transformation in Austria
With the newly adopted Renewable Energy Expansion Act which entered into force at the end of July 2021, Austria aims to achieve the goals of the Paris Climate Agreement 2015.
The act creates new framework conditions for the expansion of renewable energy in Austria. New actors were introduced to the energy market in Austria. One of them ist the Renewable Energy Community (EEG), which can also be established as a cooperative. An EEG can produce electricity from renewable energy sources and consume, sell or store this electricity.
In order to create new business opportunities and do its part in the transition to a climate neutral economy, ÖGV has formed an cooperation with PowerSolution, a provider of technical assistance to EEGs and the Volksbanken, which can offer the finanical means and banking services to establish an EEG and expand its production of electricity.
What is the purpose of an EEG, who can be its members and what are the advantages for the members? All this will be covered during the session.
The Sustainability Agenda of the Central Bank of Brazil
In September 2020, the Central Bank of Brazil included a new sustainability pillar in its institutional agenda, the BC# Agenda, signaling the importance of this topic in the scope of its legal mandate to seek price and financial stability.
At the end of last year, new regulations were published, improving the prudential framework for the management of social, environmental and climate risks by financial institutions and creating new requirements for transparency on the opportunities and risks related to the topic.
Another important initiative was the development of a sustainable rural credit bureau, an initiative that will reduce the asymmetry of information in this segment, allowing the offer of more favorable and diversified conditions of access to credit by rural producers.
Financial Sustainability - How can Sustainable transformation of our economy succeed?
DZ BANK’s Key Role to play in the Sustainability Transformation of the Real Economy. As the topic of Sustainability has grown continuously over the past decades; it seems vital for cooperative and popular banks to also focus on how they can support Customers and the Economy while complying to Regulatory basis.
However, a sustainable economy can only succeed if the green transformation encompasses all sectors and companies with a holistic approach:
– Focusing solely on already green companies, economic activities and technologies is misleading, as this approach does not contribute to solving climate change
– Raising awareness on CO2-intensive industries and technologies that still account for the largest share of CO2 emissions and thus also of climate change (e.g. energy sector, cement industry)
Green banking: Welcome to the Bank of the Energy Transition!
The new Energy Transition entity is entirely dedicated to collecting green savings and financing projects committed to the energy transition in our region. Through it, BPAURA plays fully its societal role: that of a central player able to support the transformation of the economy in response to energy, ecological and environmental challenges. It thus illustrates the best possible way of modernity and adaptability of our cooperative and regional bank model serving the inhabitants of our territory.
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