The MNB has renewed its green recommendation for credit institutions.

By: Trademagazin Date: 2026. 03. 09. 11:36

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The Hungarian National Bank (MNB) has renewed its green banking recommendation, the aim of which is for domestic credit institutions, relevant investment service providers and third-country branches to consistently and credibly manage environmental, social and governance (ESG) risks in their decision-making and operational processes.

According to the central bank’s statement on Monday, the renewed green banking recommendation incorporates the European Banking Authority’s guidelines on the management of ESG risks, but also retains several domestic expectations that go beyond EU requirements.

The new recommendation applies to domestic credit institutions as well as branches of credit institutions in third countries and investment service providers required to obtain a credit institution license.

From July 1, the supervisory requirements set out in the Green Banking Recommendation will come into effect for large, complex institutions, and from January 1, 2027 for other market participants covered by the recommendation.

When applying the renewed recommendation, institutions must adapt their operations and decision-making processes to the changed regulatory environment. The focus of this is on the consistent and integrated management of environmental, social and corporate governance risks in the operation.

The goal is for sustainability aspects to be measurably reflected in the operation of the financial system, and for the banking system to meaningfully support the green transition and long-term financial stability – the MNB emphasized.

To this end, the recommendation provides practical assistance in developing reliable corporate governance and risk management systems, which institutions must have in place in accordance with the provisions of the Hungarian Credit Institutions Act, effective from January 11 this year.

Its expectations ensure that the governing bodies of the institutions have a specific schedule, quantifiable intermediate goals and develop plans with milestones for identifying, managing and monitoring ESG risks.

The cornerstone of the development of systems is that the materiality assessment of ESG risks is integrated into the internal capital adequacy assessment process (ICAAP) in a regularly updated and documented manner, the central bank wrote in its statement.