Croatia Takes Steps to Improve Financial Compliance in Sustainable Development

As the European Union continues to push for a climate-neutral economy, Croatia is following suit by implementing measures to promote sustainable development. The country’s regulatory framework, led by the Act on Implementation of the Disclosure and Taxonomy Regulation, aims to channel financing into green projects.

A Solid Ground for Sustainable Loans

The Croatian Financial Services Supervisory Agency is responsible for supervising entities involved in the financial market and ensuring compliance with EU legislation. However, potential setbacks in implementing sustainable loans have arisen due to unclear criteria for accessing funds.

Key Challenges

• Unclear criteria for accessing funds
• Limited public awareness of sustainable financing
• Need for more stringent requirements for sustainable financing

Banks Leading the Way in Green Financing

Banks are leading providers of green loans, offering financial stability and promoting ESG financing. Almost all banks in Croatia now offer some form of sustainable loan or raise awareness about the importance of ESG financing.

Key Initiatives

• National Recovery and Resilience Plan 2021-2026 (NRRP) investing €542 million to support businesses for green transition and energy efficiency
• HBOR’s project “Reorient HBOR’s operations towards sustainable financing and green transition” aiming to strengthen its understanding of environmental risks and develop financial policies

Croatia on Track to Follow EU Members in Green Era

Sustainable financing contributes to an energy-efficient economy, ensuring companies’ commitment to addressing climate change. Although there is still room for improvement, such as determining requirements for sustainable financing and increasing public awareness, Croatia is on the right path to follow other EU members in this new green era.

Next Steps

• Determining requirements for sustainable financing
• Increasing public awareness of sustainable financing
• Continuing to invest in green projects and initiatives