The Capacity Building Alliance of Sustainable Investment (CASI) and the Central Bank of Hungary (MNB) jointly hosted a high-level symposium in Budapest, with a theme of “Unlocking the Potential of Sustainable Finance, Expanding Instruments, and Lowering Systemic Risk” on 27 August 2025. The symposium brought together over 60 participants, including central bankers, financial regulators, academic experts, and industry leaders.
The seminar featured a keynote lecture, panel discussions, and a case study on green finance and climate risk management. It fostered dialogue on sustainable finance innovation, cross-institutional capacity building, and strengthened collaboration among regional and global stakeholders.
The symposium opened with remarks from Dr. Csaba KANDRÁCnS, Deputy Governor of MNB, who highlighted MNB’s longstanding commitment to integrating environmental sustainability into monetary and financial policy.
He noted key milestones, including MNB’s 2021 extension of its mandate to support government environmental policies—the first among EU central banks—and its 2024 partnership with CASI to advance sustainable investment initiatives, building on a successful webinar on climate risk stress testing co-hosted in November 2024. “The dialogue we share with CASI is evolving beyond theoretical frameworks,” Dr. KANDRÁCS emphasized, “focusing on practical incentives and mechanisms that can translate the potential of sustainable finance into tangible action—reducing systemic risk while driving the transition to a low-carbon economy.”
Dr. Monica Billio of Ca’ Foscari University of Venice delivered a keynote on “The Role of Energy Efficiency in Mitigating Financial Risk,” drawing on over a decade of research into European sustainable finance dynamics.
Her analysis, centered on case of Italy—a regional leader in energy performance certification—revealed a significant link between improved building energy efficiency and reduced mortgage credit risk: properties with higher Energy Performance Certificate (EPC) ratings (indicating greater energy efficiency) were associated with a 39-basis-point reduction in default probability compared to less efficient buildings. In response to these findings, Italy introduced the “Super Bonus” policy, which provides 110% government subsidies for energy-efficient building renovations. While the measure has been effective in stimulating market demand, concerns remain regarding its potential to generate long-term market distortions. Additionally, she noted a pressing need for action across the EU, where a large share of buildings dated to pre-1970 and only a small fraction currently meets high energy efficiency standards, representing both a challenge and an investment opportunity for sustainable finance.
The following panel discussion moderated by Ms. Réka HÁMORI, Director of Hungarian Banking Association (HBA) explored the critical tension between scaling green credit and safeguarding financial system stability, with insights from representatives of global and regional financial institutions. Panelists agreed that while green assets—such as renewable energy projects and sustainable infrastructure—may present uncertainties (particularly due to limited historical performance data in emerging markets), these risks can be managed through robust policy frameworks and collaborative practices.
Ms. Jackie Na LIU, Head of Sustainable Finance at ICBC (Europe) S.A., emphasized the need for clear, interoperable green taxonomies to align cross-border investments with global carbon reduction goals. She also noted specific challenges of renovating historical buildings to meet green standards without compromising cultural heritage, calling for targeted financial instruments to address this gap.
Mr. Manas GIZHDUANIYEV from AIFC Green Finance Center shared Kazakhstan ’s approach to defining green loans by purpose rather than inherent risk, noting that all green lending must comply with national taxonomy and adhere to “no high environmental or social risk” criteria.
Mr. Levente SUBA (Head of Sustainability, K&H Group) and MR. Ádám CSÉCSEI (Environmental Expert, Hungarian Export Import Bank) added that current green loan demand is primarily driven by “premium borrowers” with high credit ratings, concentrated in commercial real estate (fueled by EU taxonomy requirements) and renewable energy sectors. They stressed that meaningful financial incentives—such as passing MNB’s capital relief benefits directly to clients—are necessary to drive mass adoption, as small basis-point discounts alone rarely offset the administrative costs of green loan processing for both lenders and borrowers.
Mr. Bálint VÁRGEDŐ, Senior Analyst at Department of Sustainable Finance of MNB, presented a detailed case study of Hungary’s green preferential capital requirements—globally the first economy-wide program of its kind. Under the policy, banks receive a 5-7% discount on Pillar 2 capital requirements for exposures aligned with EU and national green taxonomies, including investments in renewable energy, electromobility, and energy-efficient buildings. This policy effectively lowered the funding costs of green lending while safeguarding financial stability by capping the discount at 1.5% of a bank’s total risk exposure.
MNB’s internal data validated the policy’s effectiveness: by the end of 2024, corporate green exposures had risen sharply to approximately 5% of total credit (up from negligible levels in 2020), led by solar energy projects and sustainable real estate developments. The analysis also showed that green loans—including those for electromobility and renewables—exhibited higher “survival probability” (fewer defaults) than non-green loans, even after controlling for differences in borrower credit quality. Retail green mortgages, designed for energy-efficient homes, similarly outperformed their non-green counterparts, aligning with the findings from Professor Billio’s keynote.
The second panel moderated by Dr. Helena NAFFA of Corvinus University of Budapest focused on CASI’s role in equipping financial professionals with the skills needed to advance sustainable finance. Panelists highlighted the need to address common misconceptions, such as conflating “ESG” with “sustainability”, or perceiving green finance as a compliance burden rather than a strategic opportunity—gaps that often hinder broader adoption, particularly among small and medium-sized enterprises (SMEs) struggling to translate sustainability goals into actionable steps.
Mr. CHENG Lin, Director of Institute of Finance and Sustainability & Head of CASI Secretariat, shared CASI’s impact since its launch at COP29 in 2023: So far, CASI has trained over 6,500 professionals across 90 more countries through CASI Sustainability Forum, Technical Assistance (TA), Seminars, and the online learning platform - CASI Academy. CASI academy offers 40 hours of free courses, structured content covering 11 key topics in sustainable finance. He added that CASI plans to launch certification exams for sustainable finance professionals in late 2025, further standardizing skills across global markets. He also pointed out two key issues: misunderstanding between concepts like ESG, sustainability, and green (e.g., farmers equating "green" farming with sustainability); and oversight of technical details (e.g., rising solar panel conversion rate thresholds for green classification). He proposed solutions: a systematic approach to enforce standards (e.g., transition finance needing to consider carbon intensity and just transition/employment) and pragmatic tools (like "tick-the-box" methods) to simplify compliance for small institutions. He added China’s transition finance develops fast but is early relative to its market size, with local governments issuing practical templates, stressing frameworks must be both robust and implementable.
Mr. Daniel HOUSKA, Head of Sustainable Finance Unit at Ministry of Finance of the Czech Republic, stated that he attends as a policymaker and also teaches sustainability reporting at Prague University of Economics and Business. He emphasized the ministry’s focus on connecting with academia and improving sustainable finance communication, noting it does not prioritize ESG aspects like CSRD (though such reporting is part of the EU framework) but rather the financial side of sustainable finance. He added the ministry has integrated private sector experts into the Government Council (beyond typical public authority practices) and recently worked with the National Development Bank (which focuses on national investments) to explore blended finance’s role.
MS. Ágnes MATIS, Head of Strategic Risk Directorate at Erste Bank Hungary, noted that while most people know of issues like climate change and plastic waste, sustainable financing remains highly complex—even the bank’s colleagues and key SME clients struggle to understand and apply it (SMEs may know sustainability personally but not professionally). She added that though the banking sector is used to regulatory bureaucracy, ESG work has a “human touch” as it relates to everyone’s future, so employees engage not just for compliance but because they recognize it serves long-term interests. Within the bank, colleagues actively invite her to explain ESG (seeking understanding, not just “box-ticking”) instead of just doing routine e-learning; with clients, the bank focuses on linking sustainable financing to their needs rather than just providing paperwork. She also highlighted positive progress: both colleagues and clients now ask deeper, more substantive questions, which she attributes to an open mindset she deems key.
The symposium concluded with a fireside chat between Dr. MA Jun and Mr. Daniel HOUSKA. Three critical gaps for developing economies in scaling sustainable finance were highlighted:
(1) First, taxonomy gaps—only around 20 economies have established green taxonomies, and CASI supports countries in adopting best practices to significantly reduce taxonomy development time.
(2) Second, disclosure complexity—hundreds of overlapping global disclosure frameworks create confusion for institutions, and CASI is promoting harmonization, including advancing multi-jurisdiction common ground taxonomies and encouraging broader participation across jurisdictions.
(3) Third, project bankability—many “green” projects in ASEAN countries lack financial viability, and CASI focuses on training corporates to design bankable proposals and connect with global investors.
It was emphasized that by 2030, technical assistance should prioritize taxonomy adoption for early-stage economies and enhancement of project bankability for those with established frameworks. Sustainable finance is not just about creating rules—it is about building an ecosystem where green projects are both environmentally impactful and financially profitable, benefiting all stakeholders from central banks to small businesses.
In closing, CASI and MNB reaffirmed their commitment to advancing sustainable finance through continued policy alignment, capacity building, and international cooperation. The two institutions announced plans to co-host follow-up events in 2026 to track progress on taxonomy interoperability and the expansion of green loans, ensuring the symposium’s momentum translates into long-term action.
