ZAGREB, April 29, 2021 – Most Croatian banks still do not see climate change as a serious threat to their business, a survey by the Croatian National Bank (HNB) showed on Thursday.

The survey was presented at an online conference called “The Role of Banks in Greening Our Economies”, organized by the HNB and the European Bank for Reconstruction and Development (EBRD).

The survey, conducted among 20 Croatian banks, showed that banks do not see climate change as an immediate and serious threat to their business.

Only one bank said climate change would have a generally significant impact on the Croatian banking system, 11 banks said the impact would be moderate, while eight said it would be insignificant.

Only two banks have a climate change strategy embedded in their overall business strategy, expressing concern about the risks and anticipating possible changes to the regulatory framework. In contrast, 15 banks said they were waiting for regulators to take the first steps in this regard.

Responding to the question on risk materialization, 10 banks said climate risks would not materialize in the near future, while 11 said they did not attach major importance to climate change exposure and to the environmental risks of their portfolio.

Physical risk includes the financial impact of climate change, and five sectors in Croatia are particularly vulnerable to it: tourism, agriculture, forestry, fishing and energy distribution. More than a quarter of Croatian banks’ exposures to non-financial institutions relate to these sectors, mainly tourism, according to the survey.

However, none of the banks have so far assessed their exposure to climate and environmental risks, citing the lack of reliable data and methodology as well as the lack of qualified staff.

Sectors facing the greatest transition risk from climate change are transport and traffic, agriculture, motor vehicles, energy and petroleum products, and construction.

Only 9 banks offer green products to their customers

Most banks recognize the opportunities offered by the transition to a low carbon economy, with three quarters of them saying they could benefit from this transition by funding green projects. However, only nine banks reported offering a green product to their customers, such as loans for energy retrofitting of buildings or the purchase of electric vehicles.

HNB Governor Boris Vujčić said in his opening remarks that both the HNB and the EBRD have recognized their responsibility to highlight the role of banks in the climate transition. He recalled the 2015 Paris climate change agreement, which has been ratified by 189 countries, saying it sets ambitious targets to reduce greenhouse gas emissions and prevent further global warming.

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