Seminar on Green Entrepreneurship and a Just Transition for Sustainable Investments in Mongolia

On 12 November 2019, PAGE Mongolia held a seminar on the social and environmental considerations for greening financial investments.  Participants from the Mongolian Sustainable Finance Association discussed on the Just transition planning for sustainable investments of commercial banks and green jobs promotion for industry lending products. The event contributed to the development of risk assessment methodologies for sustainable investments.

The Mongolian Sustainable Finance Association (MSFA) includes membership of all the commercial banks in Mongolia and aims to increase the sustainability of banking activities in the country, both through upgrading the internal capacities of banks to make their operations sustainable, and externally through their investment activities.

The MSFA has created a series of guidelines for sectors considered high-risk for environmental and social impacts such as mining, construction, manufacturing and agriculture. In addition, a guideline for textiles is being developed. The guidelines discuss and develop a ‘checklist’ of questions about social and environmental risks that banks can ask when assessing potential investments.

The workshop included group work activities to assess and improve these guidelines and ensure they adequately cover social risks, including for labour standards compliance -  environmental risks, including environmental impacts- as well as risks associated with transition to sustainable business models. Presentations included Financial implications of Green Jobs and Just Transition; and Circularity and implications for financial products.

The workshop identified a number of areas where the assessment guidelines could be improved, and also a need to improve the implementation of the guidelines through increased capacity building and training of staff in asking, verifying, and monitoring loan applicants’ responses to the checklists.

The workshop concluded with the formation of a working group of officers from commercial banks, the MFSA, and the ILO to further develop and enhance the guidelines and checklist, including better coverage of labour standards and transition risk.