ESG is the new "It girl" of the banking industry
There is growing evidence that ESG is the new "It girl" of the banking industry and is infiltrating our everyday activities. The way of doing business and appreciating colleagues, service providers, customers and protecting the environment is increasingly being driven by ESG principles. This has become a business-critical task that creates many challenges for banks, including the Custody business.
Environmental, Social and Governance (ESG) is part of UniCredit Bank Hungary’s DNA and is fully integrated in our business strategies and everyday work. The ESG strategy involves, amongst other things, environmental responsibility, social engagement and sustainability in corporate governance.
As an integral part of the Bank, GSS Hungary also plays an active role in implementing the principles of the ESG strategy. With the utmost attention given to our clients’ interests, and through the use of our lobbying power, there is also a focus on shaping future market processes in line with ESG principles.
By following the path of digitalization and environmental responsibility, GSS Hungary has become almost completely paperless. One of the last areas that still requires physical documentation is Corporate Actions, making this area the one in which market processes need to evolve the most.
GSS Hungary is making significant efforts together with other Custodian Banks to achieve the acceptance of electronic documentation by issuers and authorities, thereby not only facilitating shareholder participation in corporate events, but also significantly reducing the ecological footprint of events by eliminating the use and delivery of documents around the world.
But the real step forward would be the introduction of electronic voting as described by SRD II, whereby shareholders’ votes at general meetings would be transmitted to issuers in a fully electronic and controlled way. The electronic voting would also eliminate the need for documentation and the need for shareholders or their proxies to travel to the venue of the general meetings in person. In addition to these benefits, shareholder rights would be better enforced and shareholder control over corporate governance would be strengthened, giving issuers greater incentives to comply with ESG principles.
Amongst other things, this initiative will be the focus of GSS Hungary’s future lobbying activities which will be represented at Hungarian National Stakeholders Group’s meetings and several other market discussions and workshops.