Sustainable financing in foreign and Ukrainian financial institutions

Koshman Ali
Postgraduate student of Banking Department, State University of Trade and Economics, Ukraine , e-mail: a.koshman@knute.edu.ua, ORCID ID: https://orcid.org/0009-0001-5835-0412

Cite this article:

Koshman, A. (2024). Sustainable financing in foreign and Ukrainian financial institutions [Stale finansuvannia v zarubizhnykh ta vitchyznianykh bankakh], Socio-economic research bulletin, Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 3-4 (90-91), pp. 89-107.

Abstract

The article is devoted to the comparative analysis of sustainable financing approaches implemented in foreign and Ukrainian banks. Key concepts of sustainable finance in various countries are considered, and the main trends in their development are determined. The study analyzes the regulatory frameworks, financial instruments, and risk management practices that are employed in the context of sustainable development. It also highlights the barriers Ukrainian banks face in the process of adapting international standards and offers recommendations for overcoming these challenges. The need for legislative reforms and raising awareness among market participants regarding the integration of ESG (environmental, social and governance aspects) principles into financial activities is substantiated. A detailed analysis of the growing demand for green financial instruments, including green bonds, on the global market is provided, noting that Ukraine is only at the initial stage of development in this segment. Regulatory initiatives, such as the European Green Deal, that contribute to the spread of sustainable practices are highlighted. In contrast, Ukraineʼs lack of similar initiatives hampers the broader implementation of sustainable financing. Furthermore, the research addresses the social responsibility of businesses, an essential element of sustainable finance, and how this aspect is underdeveloped in Ukraine compared to other countries. As a result, it is substantiated that in order to form a comprehensive approach to sustainable financing in Ukraine, reforms of the legal framework, the development of new financial products, and raising awareness among financial institutions and investors regarding the integration of ESG principles are necessary. The key steps for improvement of sustainable practices implementation in the banking sector of Ukraine are identified as transparency of financial reporting and introduction of mandatory reporting standards.

Keywords

sustainable financing; ESG factors; financial institutions; green bonds; risk management; international experience.

JEL classification: G210; G320; G560; DOI:https://doi.org/10.33987/vsed.3-4(90-91).2024.89-107

UD classification: 336.7:330.3

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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