Assisted by the European Bank for Reconstruction and Development (EBRD), a strategy preparation project, to facilitate greening Hungary’s capital market, will be launched in July 2020, involving investment service providers, investors and other market players, ministries and all other key stakeholders.
The comprehensive, 15-month long initiative aims to help the capital market to finance investments in support of environmental sustainability to a greater extent, and to allow ʻgreenʼ companies to access more favourable equity or bond funding.
The project to develop a Sustainable Capital Market Strategy, involving the EBRD, is supported by the European Commission’s Directorate-General for Structural Reform Support (“DG Reform”). A Consultant or group of consultants will also participate in the work. (The related tender is still open and welcomes applications. Its details are accessible on the EBRD’s website.)
To establish the financing conditions for Hungary’s climate and sustainability plans, the capital market is also required to be mobilised in addition to the banking sector. Financial instruments such as green bonds or green covered bonds may facilitate other sources of funding to be involved in environmentally friendly investments. They may offer new investment opportunities of positive ecological and social utility to investors, be it investment funds with a sustainability theme, available for the household sector or portfolios of institutional market players.
In Hungary, there are currently only few such sustainable investment opportunities, financial instruments or products. This is attributable to demand and supply factors. To explore these, and to pinpoint and handle potential market failures, the project aims to create an enabling regulatory environment.
At the end of the process, recommendations will be made to the Government, the Magyar Nemzeti Bank (MNB) and the Budapest Stock Exchange, and an action plan will be developed containing the proposed measures. As the project continues, the MNB will publish documents about strategy conception periodically on its green page.
A cikk magyarul ide kattintva érhető el.
Nyitókép: Bankár Magazin / Kocsis Ferenc Árpád.