We are making efforts to support Estonia’s bid to become the first in the world to develop a sustainability performance measurement system for corporate lending where private and public interests can be linked for climate-related goals.
Estonia has set the goal of a climate-neutral economy by the year 2050. Achieving this objective will require cooperation between the state and the private sector. It would also need a detailed plan. The plan should, however, be based on a transparent system to measure sustainability performance. After all, if you cannot measure it, you cannot improve it.
We're aware that merely improving our activities isn't enough to achieve extensive changes. Everyone needs to make an effort and work together. To support this process, we've thought about motivating the private sector to measure climate impact and help the entire financial industry to direct capital into sustainable investments effectively. This is necessary to speed up the transition to low CO2 emissions and to an economy that is resilient to climate change.
What have we already accomplished?
We have put together our first concept note for a database of climate impacts. In the database, Estonian companies could enter the greenhouse gas emissions generated from their business activity (tonnes of CO2).
Banks could rely on the central database in making financial decisions, and it would also be the underpinning for state support and guarantee programmes. The final system should be automated, without undue burden on companies, and should be in line with the principle of data collection minimization and the once-only principle.
We have already promoted our idea (article in Estonian by the LHV Group CEO on a common climate target), brainstormed with partners (policy planners, other market participants etc.) and are working to shape the final system and test the idea.
What is the final goal of the project?
Our goal is to be the first in the world to develop a countrywide measurement system where private and public interests are joined together for climate-related purposes, and which encompasses almost the whole economy at the enterprise level.
The idea is ambitious but feasible, especially considering Estonia’s unique profile – i.e. relatively small size (the 1,000 largest companies, including the whole banking sector, make up about 90% of the economy) and the high calibre of electronic public services.