Financial Sector Signs Memorandum of Understanding to Improve Sustainability

21.05.2021
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Finance Latvia, the Financial and Capital Market Commission, the Bank of Latvia, Nasdaq Riga, the Latvian Leasing Association and the Latvian Insurers Association have agreed to collaborate to promote public understanding of the meaning and principles behind sustainability and sustainable finances, as well as to promote the implementation of this in business and daily life.

“Sustainability is one of society’s most important development challenges in the next few decades. The financial sector has already taken on this challenge. Everyone should recognise that sustainability can be improved not just by planning and making investments, developing and modernising, but also by our everyday actions. The transition to sustainable growth cannot be imagined without reviewing societal views, consumer culture and opinions worldwide,” explains Sanita Bajāre, Chairman of the Board at Finance Latvia.

“To promote the understanding of financial institutions and support them with risk reduction strategies linked with climate change, the Financial and Capital Market Commission has included various steps in its 2021 priorities to promote an open dialogue with participants of the financial market and agree on an action plan for reaching sustainability goals, with the priority being climate risk management and sustainable finance options. For the long-term aims of our joint economy, we must ensure that each financial decision takes into account climate, environmental and social aspects,” emphasizes Santa Purgaile, Chairman of the Financial and Capital Market Commission.

“The Latvian financial sector clearly acknowledges that sustainability is here to stay, and that Latvia’s income level and quality of life will be determined by how quickly and to what quality the Latvian economy transitions to sustainability principles. Bringing these principles to life on a day-to-day basis is just as important to our sector as was the introduction of the Euro, which allowed us to successfully overcome geopolitical and economic challenges. Strengthening sustainability goals means we have an opportunity to leave a better Latvia for the next generations,” explains Mārtiņš Kazāks, President of the Bank of Latvia.

The European Union (EU) has developed a Green Deal which aims to make the EU economy sustainable. Implementing it requires close collaboration between the government and financial institutions, as well as a unified stance from the financial sector on the measures needed to ensure a successful, sustainable economic transformation.

“Our challenge is to show not just in words but also with our actions that the Green Deal is society’s long-term goal, not a temporary trend. This memorandum, which was agreed to by the entire financial sector, is an extremely important confirmation of our intent, but what is much, much more important and difficult is to implement the principles of the memorandum in the everyday operations of each business and institution. Any attitude and any action which brings positive changes is important,” adds Jānis Abāšins, LIA President.

“Sustainability is and is becoming an increasingly important part of businesses’ business strategy. It is being called for not just by investors, but also society, which expects greater transparency and information on these issues,” emphasizes Daiga Auziņa-Melalksne, Nasdaq Riga Chairman of the Board.

The development of financial services, business, traffic, agriculture and other sectors will be significantly impacted in the next few years by the principles of sustainable financing. Financial service providers must adapt their products and services to the new requirements, integrate sustainability risk models, develop their data collection infrastructure and respective IT solutions. At the same time, financial institutions must be willing to support their customers, particularly business clients, in this transformation process, and must stand as an example to other sectors, which representatives of the financial industry have agreed to do.

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