In 2016, the European Bank for Reconstruction and Development (EBRD) marked 25 years since its work began to support the transition to open market economies of the countries of central and eastern Europe and later the former Soviet Union.
The Bank was established at a time when many of these countries were facing an environmental crisis, carrying the communist era’s legacy of widespread environmental neglect and wasteful use of energy.
However, despite massive efforts to reduce environmental degradation in our region – and with noticeable improvements in air quality, water management and use of renewable energy sources over the past 25 years – the EBRD region still lags behind, with an average carbon intensity of almost five times higher than the EU-28 average.
Helping our countries get on a path to sustainable growth, both in the economic and environmental sense, has been a key component of the EBRD’s mandate from the very beginning. Since then we have expanded the concept of what sustainability means; moving from a concentrated focus on pollution control to more holistic and integrated considerations of environmental, climate, labour, safety and social issues.
We have also re-assessed and revised the transition concept that lies at the heart of our mission. The updated concept, approved by shareholders in 2016, recognises the need for a strong market as well as state institutions and places greater emphasis on the desired outcomes of the transition process, which should seek to make an economy competitive, well-governed, green, inclusive, resilient and integrated.
Each of these qualities constitutes the roadmap for EBRD investments and policy. From 2017, these six qualities will be formally integrated into the reporting of transition impact, one of the key operating principles of the Bank.
A Bank initiative that explicitly promotes the green transition quality was rolled out in 2016: the Green Economy Transition (GET) approach, which puts investments that are of benefit to the environment right at the centre of the Bank’s activity.
With our new GET approach comes a more explicit acknowledgement that climate change and environmental degradation stand in the way of transition and impede both economic activity and human well-being.
The GET approach seeks to increase the volume of green financing to 40 per cent of EBRD annual investment by 2020. The GET is also helping to broaden the range of environmental projects the EBRD is involved in, while at the same time continuing the policy dialogue and private sector support that the Bank is known for that will drive the growth of the green economy across the region.