The National Bank of Moldova has submitted the document for public discussion. The consultations will last until June 2.
It is developed in accordance with the National Program of Moldova’s accession to the EU for 2025-2029 and provides for the transposition of a number of EU directives and regulations on banking activity.
ESGs contribute to sustainabledevelopment
The concept of ESG (environmental, social, governance) is introduced, which stands for “nature, society, governance”. This is a set of rules and approaches to doing business that contribute to its sustainable development.
E – attentive attitude to the environment. S – social responsibility. This includes interaction with the community at large, customers and employees. Compliance with labor standards, quality service, safety and charitable initiatives.
G – responsible corporate governance. Transparency of the company’s operations, safeguarding customer data, paying white salaries and combating corruption.
The draft proposes to introduce these requirements into legislation as mandatory for banks. And banks, in turn, will have to test their resistance to them, as well as report to the National Bank on their exposure to risks of non-compliance.
The trend towards responsibility and sustainability has spread to the investment sector in recent years. ESG-principles were first formulated by former UN Secretary General Kofi Annan. He suggested that managers of large global companies should incorporate these principles into their strategies, primarily to combat climate change. The phenomenon has taken hold abroad.
Gender neutrality and riskmanagement
Another time-sensitive commitment is gender neutrality in the design and implementation of internal policies on hiring, career growth and development, access to training, etc.
In addition, the regulation introduces a provision on the implementation of a conflict of interest management mechanism in banks when it comes to granting loans and other transactions involving bank management members and their affiliates. As well as provisions relating to remuneration policy in order to exclude increased risks when increasing and to utilize adjustment mechanisms.
The Regulation is also supplemented with norms for detection, management, monitoring and reporting of specific bank risks – credit, market, counterparty, concentration and others.
It also introduces a methodology that the bank is obliged to use when assessing risks arising from possible changes in interest rates affecting the cost of equity capital and interest income from operations outside the trading book.
