Taking Stock Of Greening In The Georgian Financial System
Green finance holds great importance today when it comes to combating climate change and achieving sustainability goals by directing investments towards environmentally friendly projects. This approach promotes energy efficiency, clean transportation, and sustainable agriculture, while also mitigating greenhouse gas emissions and fostering economic growth. Ultimately, by integrating environmental considerations into financial decisions, green finance ensures a more sustainable and resilient global economy.
This policy paper aims to analyze the current status of green finance in Georgia, identifying and addressing gaps and opportunities therein and then issuing recommendations. Of the latter, key recommendations include fostering collaboration among stakeholders, including the NBG, commercial banks, and IFIs to ensure alignment with green finance initiatives. Moreover, by establishing dedicated platforms for dialogue and organizing regular meetings, stakeholders can work more collaboratively to exchange expertise and address current gaps and obstacles hindering the progress of green finance.
Simultaneously, to address potential barriers, the paper highlights that efforts must be intensified to enhance the capacity and technical proficiency of bank personnel in navigating green finance principles and regulatory frameworks. To address these shortcomings, comprehensive training programs, facilitated by international and local experts leveraging IFI resources, could equip bank staff with the necessary skills in risk management, portfolio assessment, reporting, and compliance with green taxonomy regulations.
Furthermore, the paper concludes that it is essential to establish robust monitoring and enforcement mechanisms to sustain the integrity and credibility of green finance activities in Georgia. Here, regular audits and inspections conducted by the NBG may help to validate the reporting accuracy, prevent greenwashing, and ensure adherence to established standards, thereby boosting transparency and accountability within the financial sector. By addressing potential barriers and implementing comprehensive monitoring and enforcement measures, solid foundations can be laid in Georgia to promote green investments and sustainable economic development.