Sustainability: A journey, not a destination

In a world where we are more connected than ever, climate change and socio-political upheavals are not just one nation’s problem anymore, but everybody’s.

It’s amply clear that building resilience with an eye on sustainable growth is the only way forward in an increasingly uncertain world.

Sustainability has already been a priority in emerging Europe. The devastating impacts of the Covid-19 pandemic, the war in Ukraine, and more recently the extreme drought hitting much of Europe, potentially the worst in 500 years, underline the urgency of a climate-smart roadmap.

In Central and Eastern Europe, significant progress has been made to put sustainability at the top of the agenda. On the policy side, the European Union’s Green Deal and taxonomy provides the region with an incentive to improve sustainability standards and many countries in the region have recently started to
align legislation accordingly.

The IFC is supporting the process, working with financial regulators and banking associations in the region to develop sustainable finance roadmaps to promote and provoke an accelerated shift by the financial sector to a sustainable path.

Additionally, as the focus on Environment, Social & Governance (ESG) reporting grows, IFC also supports efforts to enhance the landscape of sustainability disclosure, supporting companies, investors, and regulators by providing tools and resources to enhance disclosure and transparency.

For instance, the National Bank of Georgia has developed and implemented its Roadmap for Sustainable Finance since 2019, with the support of IFC and the IFC-facilitated Sustainable Banking and Finance Network. This has resulted in new frameworks for ESG disclosure for banks, embedding ESG expectations in the corporate governance code for banks, and guidance for green bond issuance together with a new Sustainable Finance Taxonomy published in Georgia in August 2022.

The private sector, beyond simply complying with these new regulations, has been playing a crucial role in contributing to the building blocks of a sustainable future. Most companies understand that good corporate governance is beneficial not only to their financial but also their climate and sustainability performance.

To guide companies, IFC has globally accepted methodology for governance of sustainability issues, as well as performance standards to manage environmental and social risks.

As one example, our recent engagement with Telecom Armenia is supporting the upgrade and expansion of the company’s digital network while also contributing to reduced energy consumption given subscribers will have access to enhanced digital services through more energy-efficient infrastructure,
contributing to climate mitigation.

Through IFC’s support, the company will also further enhance its corporate governance and E&S policies and practices.

However, we need to remember, achieving sustainability is a journey, not a destination, and challenges remain, including collecting, managing and using ESG data for risk modelling, translating ESG strategy into the organisation’s ecosystem, and transparently communicating and delivering on ESG commitments.

Unique opportunity

Moving forward, despite the ongoing war, market disruptions, and the lingering impacts of the global
pandemic, Central and Eastern Europe has a unique opportunity to make climate investments that will not only unlock short-term gains—like jobs and economic growth—but also deliver long-term benefits, including decarbonisation and resilience. This is fundamental to achieving sustainability. The process
can be challenging, but our goal should be to achieve a just transition.

While there are no simple solutions, with careful thought regarding impacts—economic, environmental, and social—we can find avenues that are beneficial not only for the environment but also for people. This
requires a recognition that there has to be change. Business as usual will not help address the challenges. All stakeholders, including governments, municipalities, individuals, and businesses need to step-up and do their bit, whether that is shifts in consumption patterns, recycling, adopting new business models, or putting in place more thoughtful regulation and policy actions.

In a world where we are more connected than ever, climate change and socio-political upheavals are not just one nation’s problem anymore, but everybody’s. It’s time we take responsibility for the future we are about to create. Now is not the time to be complacent, there is much to be done.

This article first appeared in the Future of Emerging Europe Sustainability Report, published by Emerging Europe as part of the Future of Emerging Europe programme. You can download a free copy here.

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About the author

Cheryl Hedleson Hanway

Cheryl Hedleson Hanway

Cheryl Hedleson Hanway is senior manager for infrastructure and natural
resources at the International Finance Corporation (IFC).

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