Domestic SMEs may lose their supplier positions if they do not consciously strive to reduce their carbon footprint

By RockedBuzz 6 Min Read

The merger process of Magyar Bankhold – now MBH Bank – has been completed, the second largest bank in Hungary created after the merger of MKB, Budapest Bank and Takarékbank. This also imposes a serious responsibility on the financial institution, which must assume a serious role both in its own operations and in the sustainability efforts of its customers.

The merger process affected many areas, from cash flow to branch service, but the former member banks’ own social and sustainability initiatives also had to be combined, overlaps eliminated, and synergies strengthened.

Thanks to these efforts, the bank created its ESG strategy last year, the main element of which is the Net zero program, which aims to make the bank carbon neutral by 2050.

In order to achieve this, the financial institution has to overcome many challenges, since despite reducing its emissions from its own operations, according to some calculations, the customer portfolio produces 700 times more emissions than the bank itself.

But what does the implementation of a “carbon neutrality plan” look like in practice?

The first and most important thing is to establish the base values: it is not possible to credibly create and implement any emission reduction plan that does not include the appropriate data for the base year. This is not an easy task, MBH Bank has the most branches in the country, nearly 600, whose energy assessment is a big challenge in itself.

And the measurement of the emissions of the corporate clientele can only work with a self-declaration method, since – for the time being – SMEs are not subject to the introduction of sustainability reporting and ESG strategy obligations.

“There are still great opportunities in optimizing one’s own operations, the energy modernization of the mentioned branches, paperless operation, the rise of digital banking, or the greening of the car fleet all have demonstrable results, but to achieve the goals, even more is needed,” he said. György Szege, Head of ESG and Sustainability at MBH Bank at the conference.

György Szege, Head of ESG and Sustainability at MBH Bank
György Szege, Head of ESG and Sustainability at MBH Bank

Within the framework of the supplier program, the bank’s subcontractors also need to take the appropriate steps, because this is the only way to achieve carbon emission reduction of the entire value chain of the company’s operations.

Carbon compensation is a well-known and applied strategy worldwide, in the framework of which the company can offset its emissions by planting forests at an arbitrary point.

MBH is more difficult in this, but “Think global, act local!” chose a solution much closer to philosophy: with the involvement of 150 colleagues, they planted a forest in a settlement in the south of the Danube.

The introduction of the ESG approach and its general acceptance within the organization are essential to achieving real success, since sustainability efforts cannot work without initiatives from below.

Determining the carbon footprint of customers is a much more difficult task, since they are not subject to the regulations applicable to listed companies. The methods that can be used to estimate the footprint are becoming more and more common and at the same time more accurate.

Dr. Hajnalka Csorbai, strategy director of Opten He began his presentation with a strong, but hardly debatable statement from the point of view of company managers:

It would be a mistake to think that issues affecting the company’s basic operation and profit-making capacity and sustainability efforts are on equal footing. If certain rules make the company’s activities impossible, then there will be nothing to make environmentally friendly, and the whole society and economy will also lose.”

Dr. Hajnalka Csorbai, strategy director of Opten
Dr. Hajnalka Csorbai, strategy director of Opten

Opten performs its various services using the analysis of company data. Although the examination of emissions has not been important so far, many domestic SMEs may also be affected through the aforementioned supplier programs. Their weight is enormous in the domestic economy, they employ the majority of employees, although their economic performance is well below that of large companies.

In order for the sector to survive and develop, it is essential to maintain supplier positions, which is hardly possible in the absence of firm ESG commitments.

While a large company has plenty of human resources who deal specifically with this area, SMEs are in a more difficult situation, if only in terms of calculating the current carbon footprint.

For them, a solution could be a service that, with the help of a questionnaire and public data, a balance sheet, and the analysis of utility bills, can provide a relatively accurate estimate of the emissions of the given company. In this way, even smaller companies can save a lot of resources and time, while maintaining their business positions.

Cover image source: Portfolio

Share This Article
Leave a comment