Towards a Polish roadmap for sustainable finance | In Principle

Sustainable finance is an approach that links financial issues with care for the environment, society, and corporate ethics. In Poland, the development of sustainable finance will continue to be handled by the Sustainable Finance Platform.

In January 2024, the Ministry of Finance confirmed its intention to continue the proceedings of the Sustainable Finance Platform, which had last met in November 2023.

An initiative operating under the auspices of the Ministry of Finance and bringing together leading public administration institutions with a stake in the Polish financial market (including the Polish Financial Supervision Authority—KNF), the Sustainable Finance Platform began its work in 2022. It is designed as a space for cooperation between the public administration and financial sector participants, enabling definition of strategic directions for the development of green finance in Poland. The Sustainable Finance Platform has set as its objective the development of a coherent, comprehensive and feasible Polish roadmap for sustainable finance.

Workflow

The Sustainable Finance Platform proceeded in four working groups, with the objective of formulating recommendations for actions in specific areas of sustainable finance:

Green bond market development, tasked with:

• Identifying policies and measures that would help to develop the Polish market for sustainable corporate and local government debt
• Creating an action plan to develop practical guidelines
• Investigating the feasibility of establishing a green bond competence centre

Application of the EU Taxonomy, tasked with:

• Identifying barriers to companies’ application of Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (known as the Taxonomy Regulation or the EU Taxonomy), and measures to increase the use of this regulation by market participants
• Drafting an action plan to develop sector guidelines to help market participants better understand the EU Taxonomy
• Identifying the support companies require to assess their compliance with the EU Taxonomy

ESG reporting, tasked with:

• Assessing the state of the market for non-financial reporting
• Developing recommendations on non-financial reporting for the sustainable finance roadmap in Poland

Research, education and training in sustainable finance, tasked with:

• Reviewing the existing offer of education and training and developing an action plan and tools to build relevant competencies
• Evaluating the feasibility of establishing a centre of competence providing reliable knowledge on sustainable finance
• Creating a centralised inventory of existing research programmes, and an action plan to stimulate academic research and ensure that the results are delivered to the market.

During Sustainable Finance Platform meetings, participants discussed reports prepared for the project, on the investment gap (“Bridging the climate financing gap with public policy instruments in Poland—Good practice report”), and barriers to the development of sustainable finance in Poland, among other issues.

The conclusions of these reports seem extremely relevant. A significant investment gap was identified, requiring the mobilisation of public and private investments in all sectors of the Polish economy. Although the report found that the transition to sustainable finance will not require additional capital, it does require redirection of existing public and private capital. Banks such as the EBRD and the European Investment Bank will engage in the necessary investments first, paving the way for other financers. Transition financing will be crucial to supporting the transition of hard-to-decarbonise sectors, as investments compliant with the EU Taxonomy will constitute only a fraction of what is required.

The identified barriers to development of sustainable finance in Poland include low public awareness, a lack of clarity in the existing regulations, and problems with the availability of reliable, comparable, high-quality data. The board would prioritise these barriers and cross-sectional barriers (e.g. political), while the barriers in specific areas would be handled by the relevant working groups. It was stressed that the role of supporting the transition of hard-to-decarbonise sectors in the development of the Polish economy must be recognised and clearly defined.

Recommendations for the roadmap

In November 2023, all working groups completed their work and issued recommendations for measures in their area. The key recommendations include:

• Green bond market development—strategic stimulation of the green financing market, lowering the cost of green financing, stimulation of the corporate bond market by adopting corporate transition strategies and green financing for local governments
• Research, education and training—standards for universities and training programmes, with high-quality services ensuring the flow of comprehensive information on sustainable finance to businesses
• ESG reporting—a guide to ESG reporting (with a particular focus on listed companies and SMEs), access to ESG data, ensuring the reliability, functionality and completeness of ESG data
• Application of the EU Taxonomy—facilitating access to taxonomic data and compliance with the EU Taxonomy, support for application of the DNSH principle (“do no significant harm”) and minimum guarantees, support for calculation of the carbon footprint, and reduction of reporting costs within the EU Taxonomy.

The recommendations are to be included in a roadmap for development of sustainable finance in Poland. We will follow the further work of the Sustainable Finance Platform.

Ewa Winiarz, attorney-at-law, Banking & Project Finance practice, Wardyński & Partners