Sustainable development as a strategic priority: why Oschadbank is strengthening its ESG practices during the war
Interview
In mid-September 2025, Oschadbank launched its own ESG Center within the Strategy and Development Department.
It is clear that the creation of a new division entails additional costs, which all institutions and organizations without exception need to avoid during a full-scale war. However, I believe that the creation of an ESG Center, which is responsible for environmental, social, and governance (ESG) issues, is entirely justified. Moreover, I believe that every Ukrainian bank should have such a unit.
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Why is ESG not an optional initiative but a strategic priority for Oschadbank?
For Oschadbank, sustainable development is an integral part of the bank's role in the country's economy. We are the second largest bank in terms of assets, have the largest branch network in Ukraine, and are designated by the National Bank of Ukraine as a systemically important bank. We serve over 6 million customers, implement a significant number of partnership and grant programs for micro, small, and medium-sized businesses (MSMEs), and support strategic sectors of the economy and the state's defense capabilities. In addition, Oschadbank is one of the largest employers in the country, with nearly 18,000 employees.
With such a scale of activity, any decision made by the bank has a multiplier effect and affects the country's economy as a whole. That is why ESG factors (environmental, social, and governance) are primarily a management tool for us, allowing us to systematically take non-financial risks into account and act in line with the expectations of the state as a shareholder, international partners, and society.
At the same time, the implementation of ESG approaches is a matter of long-term sustainability and competitiveness. It directly affects access to capital, participation in international programs, and the expansion of the partner network. That is why the principles of sustainable development have been integrated into Oschadbank's Strategic Program for 2024–2028: increased focus on ESG is one of the nine strategic directions and, accordingly, a priority at the senior management level.
What is the role of the Cabinet of Ministers of Ukraine, the National Bank of Ukraine, and other regulators in implementing ESG approaches?
Ukraine has demonstrated a clear intention to implement sustainable development financing principles as the basis for economic recovery. An important step was the creation of a specialized platform under the Cabinet of Ministers of Ukraine, which signals a transition from declarative intentions to the formation of a concrete institutional infrastructure. The state is increasingly acting as a moderator of dialogue between business, the financial sector, and international partners.
The platform is intended to become a center for developing strategic decisions, synchronizing the efforts of various ministries and agencies in attracting green investments, integrating ESG standards into public policy, and ensuring transparency in the use of resources during post-war reconstruction. The institutional basis for its activities was, in particular, the approval on February 6, 2026, of the composition of the relevant working group, which formalized interagency cooperation in this area. Representatives of Oschadbank were also included in the working group.
At the same time, the National Bank of Ukraine is expanding the regulatory framework in the financial market. A significant step is the approval of changes to the methodological recommendations on corporate governance in banks, which significantly expand the sustainable development component. Banks are recommended to develop and implement internal documents on sustainable development, as well as to integrate ESG factors into their risk management, strategic planning, and internal control systems.
The NBU is also actively moving towards developing green financing instruments and preventing the misrepresentation of environmental initiatives. This transformation of corporate governance is aimed at ensuring the long-term financial stability of the banking system, improving the quality of non-financial risk management, and aligning the activities of financial institutions with global sustainable development goals.
The regulatory logic is generally aimed at future harmonization with European legislation. For financial institutions, this means the need to act proactively: those who start the transformation now will go through further regulatory changes much more comfortably.
To what extent have the expectations of international investors and partners influenced the decision to strengthen ESG practices?
For Ukrainian banks, in addition to the state and the regulator, international financial organizations (IFOs) are one of the key drivers of ESG transformation and integration into their activities. Investors and partners are already assessing the existence of relevant policies, environmental and social impact management systems, human resource management practices, risk management, and approaches to sustainable financing.
Oschadbank has one of the largest partner networks among Ukrainian banks. To maintain our leading position, remain a reliable partner for IFOs, and expand opportunities for creating preferential and grant programs, we systematically integrate sustainable development practices in accordance with the recommendations and requirements of our stakeholders.
Cooperation with institutions such as the EBRD or the EIB allows us to see ourselves through the eyes of an investor: to identify gaps, determine areas for process improvement, and build an effective ESG management system. This is not only a matter of finance but also of reputation and trust. Banks with a mature ESG system are perceived as more stable and predictable partners.
Is there a difference between the approaches to ESG in international banks and in Ukraine?
The main difference is in the maturity of the systems, although this gap is rapidly narrowing. In many European banks, ESG factors are deeply integrated into risk management, the loan portfolio, and operational activities. Non-financial data drives strategic decisions, and sustainable development strategy is an integral part of business strategy.
European banks operate in an environment of clear regulatory requirements for ESG management and non-financial disclosure. Sustainability reporting is formalized and similar to financial reporting. It is subject to verification by auditors and investors.
In Ukraine, we are gradually moving towards this model. Many organizations are still in the process of building a basic system: forming policies and strategies, defining organizational structures, regulating processes, and building internal expertise. This is a natural stage of development, especially in the absence of a fully formed legislative framework. At the same time, we have an advantage—the ability to immediately orient ourselves towards modern European standards and best international practices.
What steps have already been taken in the direction of ESG?
Oschadbank is consistently integrating sustainable development principles into all key processes, particularly in the area of risk management. In 2024, the first step was to introduce ESG practices in the MSME business line. A model for comprehensive assessment of borrowers' environmental and social risks was developed and integrated into the lending process.
The bank actively develops both green and social financing: it supports alternative energy for businesses and households, promotes sustainable transport, and offers products for veterans, women, internally displaced persons, and other vulnerable groups.
An important step at the end of 2025 was the creation of the ESG Center, a specialized unit responsible for the systematic implementation of ESG factors in the bank's activities.
In 2025, Oschadbank joined two technical assistance projects of the European Investment Bank and the Green for Growth Fund. As part of one of these projects, a comprehensive assessment of the current state of ESG implementation was carried out, and a roadmap for further steps was developed. This makes it possible to build a system based on independent expertise and best market practices.
How has the war affected the implementation of ESG?
The full-scale war has shifted the focus and, at the same time, accelerated the integration of sustainable development principles. While the environmental component was perceived as “untimely” for some time, the social component, on the contrary, has significantly strengthened: employee safety, customer support, work with veterans, financial inclusion, and accessibility.
The war has also exacerbated the issue of operational resilience: business continuity, infrastructure resilience, and risk diversification have become critically important. Banks have revised their approaches to assessing customer risk, taking into account their location and industry characteristics.
In addition, international partners financing Ukraine have increased their transparency and reporting requirements. Reconstruction requires a clear understanding of how funds are used and their impact.
What is the future of ESG integration after the war?
Once the war is over, the pace of ESG integration will only increase. Large-scale international financing for reconstruction will be accompanied by clear requirements for procedures, data reliability, and the ability to manage impact, risks, and opportunities.
The ESG management system will become the “entry ticket” for access to foreign capital. Banks with a mature non-financial risk management model will gain a competitive advantage.
This involves deeper integration of ESG into credit processes and risk management, the development of specialized financial instruments—green and social loans, financing for energy efficiency, renewable energy, and infrastructure projects. The role of qualitative and quantitative data, as well as supervisory bodies, in the implementation of ESG strategies will grow.
For Oschadbank, this is a logical continuation of the transformation that has already begun. We are building an ESG management system that meets international standards, ensures long-term sustainability, and strengthens the bank's strategic position.
Interview
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