Climate change and the ESG transformation of the financial system – 8th ECB Simulation Conference
The Training Day serves as the inaugural day of the annual ECB Simulation Conference for university students, where distinguished representatives from institutions, businesses, and academia share their knowledge and experiences with the participants.
The Training Day for the 8th Conference took place at the Bank of Greece on November 22, 2024.
The key themes of the Conference were:
- Monetary Policy: The interaction with Fiscal Policy, the risk of fragmentation, and the challenges of effectiveness in a permacrisis environment.
- Climate Change and the transformation of the financial system in the field of ESG.
- Digital Euro: The impact on the payments landscape and financial stability.
The 8th Conference was made possible thanks to the invaluable support of the Bank of Greece, the Hellenic Bank Association, Alpha Bank, PwC Greece, the National Bank of Greece, and the Athens University of Economics and Business.
Here, we highlight the positions of the speakers during the discussion panel on the “Climate change and the transformation of the financial system in the ESG sector”. We are greatly honoured to have speakers such Ms. Louka Katseli, Senior Independent Non-Executive Director, National Bank of Greece (Cyprus) & Professor Emeritus, National and Kapodistrian University of Athens, Mr. Dimitris Kazazoglou – Skouras, Group ESG Coordinator, Alpha Services & Holdings S.A and Ms. Phoebe Koundouri, Professor of Economics at the Athens University of Economics and Business & Technical University of Denmark, President of EAERE, Co-Chair of SDSN Europe, Director of AE4RIA.
Continuing the discussion panel Mr. Dimitris Kazazoglou-Skouras presented Alpha Bank’s practices for integrating ESG principles, emphasizing the importance of sustainable financing. Alpha Bank strives to ensure that the businesses it finances are sustainable, giving a particular focus on investments in renewable energy sources and the circular economy. He gave the example of the maritime sector, where the transition to “green ships” remains in an experimental stage, requiring a framework for evaluating technological investments that combines banking expertise with engineering specialization.
Highlighting the National Energy and Climate Plan, he noted that the green investments required by 2030 amount to €100 billion — a sum that exceeds the capacity of the banking system. This underscores the urgent need for fostering synergies both within the private sector and between the private and public sectors. Alpha Bank supports sustainable development across the entire value chain by financing businesses and their suppliers. However, the lack of mature organizations and the complexity of the licensing framework pose significant challenges.
Closing his remarks he emphasized that despite these difficulties, ESG principles represent a unique opportunity for sustainable growth. The main risk lies in inaction, as failure to act is estimated to result in incalculable costs.
The discussion was initiated by Ms. Louka Katseli, who highlighted the challenges and opportunities the financial sector is facing in adopting ESG principles. She emphasized the evolution of ESG principles from the 1980s to the present day and underscored their importance for sustainability and growth within the financial industry.
Ms. Katseli stressed the role of banks and financial institutions in promoting investments with positive social and environmental impacts. She also pointed out the growing importance of complying with EU regulatory requirements, such as the European Green Deal and the CSRD Directive. She presented the green bond and social loan markets, which now exceed trillions of dollars globally.
She discussed the results of the ECB’s climate stress tests, which underscored the need to accelerate the green transition. Additionally, she highlighted the critical role of artificial intelligence and blockchain technology in enhancing transparency and managing ESG data. Lastly, she underlined the opportunities for attracting investments and strengthening business resilience while noting potential risks, such as greenwashing and the increased compliance costs faced by small and medium-sized enterprises.
The panel concluded with a recorded contribution from Ms. Phobe Koundouri, who highlighted the critical roles played by the scientific community, governments, businesses, and other stakeholders in financing and implementing sustainability initiatives.
She began by emphasizing the need for interaction between academia and governmental and corporate leadership with the aim to develop innovative strategies for sustainable development, stressing the importance of education and training. She pointed out that decisions should align with guidelines such as the European Green Deal and the United Nations’ 17 Sustainable Development Goals (SDGs), which extend beyond environmental concerns to encompass economic and social resilience.
A central theme of her address was securing the human, financial, and natural resources necessary for the green economy, with particular emphasis on the systematic and updated valuation of natural resources. She also highlighted the importance of a clear action plan to monitor each country’s progress toward achieving SDGs.
Ms. Koundouri further stressed the necessity of transforming ESG systems into a unified and definitive framework, revising corporate action plans, and leveraging new technologies, such as artificial intelligence, to optimize their value.
In conclusion, she drew attention to the need for a redesign of global financial architecture, proposing lending terms that would enable developing countries to invest in green and digital transitions while ensuring geopolitical and financial stability.
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