Center-invest Bank has introduced an ESG rating system for its SME customers. It reflects a company’s commitment to sustainability and determines the interest rate on the loan: the higher the rating, the lower the rate.
The borrower sustainability factor has been assessed by the bank since 2010, however, the bank’s specialists have now developed a unique methodology for analysing customer’s ESG metrics and implemented it in the lending process.
All lenders are ranked into 7 ESG categories from A to G, depending on the degree of environmental, social and governance considerations they incorporate into their activities. Such ratings will underpin the bank’s conclusion on the solvency and sustainability of the customer’s business alongside the traditional financial business analysis and will allow the bank to build a sustainable, high-quality loan portfolio.
“ESG rating implementation results have shown that 87.5% of the bank’s customers fall into the top 3 quality categories. They also reflect the bank’s actual efforts to implement the sustainable financing. Center-invest Bank’s track record clearly demonstrates that small businesses are faster in assimilating the principles, methods, and technologies of the increasingly popular EGS business model. They have successfully expanded the scope of risk consideration and the horizon for decision-making, working in the interests of the present and future generations,” says Maria Khristolyubova, Deputy Head of the Corporate Services Department.
Center-invest Bank’s digitalisation of its ESG banking experience facilitates the provision of systematic consulting and training to customers on improving their ESG rating on the basis of a training platform, the bank’s accelerator (acc.centrinvest.ru).
The innovative ESG-rated lending system is part of the Center-invest Bank’s ESG-digitalisation 2.0 strategy. In 2021, the bank launched the world’s first ESG balance sheet, which shows how customer funds raised by the bank are transformed into the structure of its loan portfolio to achieve the Sustainable Development Goals and the implementation of the National Projects. As of 01.01.2022, the Bank had invested a total of RUB 299.3 billion in the Sustainable Development Goals and RUB 261.7 billion in the National Projects.