On Wednesday Richárd Végh, CEO of Budapesti Értéktőzsde Zrt. was re-elected as head of the Corporate Governance Section of the HEA for additional three years. During the event held in the online space the members also decided to change their name to Sustainability Section.

At the beginning of the event ‘Banks and Sustainability: New Challenges in Corporate Governance’ was discussed by Csaba Kandrács, Deputy Governor of the MNB for financial supervision and consumer protection, followed by Richárd Végh, CEO of BÉT on the Green Finance Efforts of the Budapest Stock Exchange. The two presentations can be accessed at the HEA podcast channel.

‘The MNB is drafting a green recommendation for the banks and public consultation on the subject will commence in a few weeks’, said Csaba Kandrács, Deputy Governor of the MNB on Wednesday at the online conference of the Corporate Governance Section. He also highlighted that corporate governance was shifting towards environmental and social sustainability to a greater extent. ‘70 percent of the banking sector institutions are still focused on the short term, putting financial value creation in the forefront that should shift towards sustainable finances’, he added.

The MNB’s green recommendation emphasizes the environmental and financial risk measurement and sustainability aspects in relation to climate change. ‘According to the central bank recommendation currently in the process of development the credit institutions will have to transform their corporate governance systems to make it possible for the respective management bodies to asses and categorise the environmental risks in relation to climate change. The management bodies will be required to have sufficient knowledge and understanding of these risks’, he said. Therefore the responsibilities within the institutions will have to be adequately outlined, consistent, enforceable and well documented.

According to the latest survey of the MNB carried out in October less than one-third of the domestic bank executives address sustainability and climate change issues. This kind of approach requires changes; on a global scale 75 percent of the credit institutions discuss these risks at senior level. 50 percent of the Hungarian banks fail to determine responsibility for these risks, which leaves plenty of room for improvement.

Mr. Kandrács added: ‘According to its strategy the MNB will be carbon neutral from 2021, implementing long-term natural habitat projects to compensate for its carbon footprint.

BÉT CEO Richárd Végh, President of the Section announced: the Stock Exchange is launching public consultation on the green (ESG) recommendation between 25 November 2020 and 31 January 2021 to help issuers comply with the reporting and data supply rules. The recommendation is expected to be published in the first quarter of 2021.

‘The stock markets act as catalysts in terms of sustainability: the ESG (Environmental-Social-Governance) approach is the basis for determining the sustainability of the individual companies and investments. The relevant laws and regulations keep changing, and following them is a real challenge for the financial institutions’, he added. According to Richárd Végh the ESG reporting practice of the key Hungarian issuers is exemplary, but it will take increasing efforts to keep up in future. (MTI)

During the re-election meeting the members voted for BÉT Secretary Gábor Szarka, Member of the Supervisory Board of the HEA to remain president of the section for additional three years. The elected Board members of the section include the following: Gusztáv Báger, University Professor; Balázs Bodzási, Associate Professor, Head of Department of Business Law at the Corvinus University of Budapest, former Deputy Secretary of State of the Ministry of Justice; Sujit Chaudhuri, Associate Professor of the University of Physical Education;  Attila Chikán Jr., CEO-Chairman of ALTEO Nyrt.; Ágnes Hornung, Member of the Supervisory Board of MKB Bank Nyrt., former Secretary of State of the Ministry for National Economy; Csaba Kandrács, Deputy Governor of the MNB; Bianka Parragh, Senior Lecturer of the Keleti Károly Faculty of Economics, Óbuda University and Member of the Monetary Council of the MNB; Norbert Szivek, Member of the Supervisory Board of MOL Group, former CEO of MNV Zrt.; Sándor Vízkeleti, CEO of Amundi Zrt., Chairman of the Association of Hungarian Investment Fund and Asset Management Companies; László Windisch, former Deputy Governor of the MNB; and Levente Zsembery, CEO of X-Ventures, former Chairman of the Hungarian Venture Capital and Private Equity Association.

We congratulate the elected Board Members and wish them good health and success in the future!

Related documents:
Presentation by Csaba Kandrács (pdf)
Presentation by Richárd Végh (pdf)
Summary presentation on the past three years of the Section (pdf)