Montenegro’s financial sector has made significant strides in adopting ESG (environmental, social and governance) standards, but there is still room for improvement, particularly in the area of green financial products. Biljana Gligorić, advisor to the governor of the Central Bank of Montenegro, expressed hope that in the coming year, green credit lines will become more diverse, with broader sector coverage and more favorable terms for clients, especially compared to conventional loans. This, she believes, would contribute significantly to the momentum of the green transition.
The Central Bank (CBCG) recognizes its role in facilitating these processes and acknowledges the challenge that banks face in proving the sustainability of projects in the context of climate challenges. The ongoing development of a taxonomy to standardize green investments will aid in this effort. The process is being coordinated by the Regional Cooperation Council (RCC) for the Western Balkans, with participation from the CBCG.
ESG standards are seen as a substantial development opportunity for Montenegro’s economy. Gligorić emphasized that these standards should not be viewed merely as another regulatory obligation but as a pathway to improving the economy and addressing social, environmental, and economic impacts. Although ESG reporting is still voluntary, it is expected that, over time, it will become mandatory for some organizations, and companies that embrace these standards early will gain a competitive advantage. Such organizations will likely be recognized as responsible and will attract more customers and clients who are increasingly concerned with sustainability.
Crna Gora, as a constitutionally declared ecological state, has the potential to attract “green capital” and investments in renewable energy. This potential is acknowledged in strategic government documents, and it is expected that green projects will become the primary focus for investors. However, this requires adaptation from both the private sector and regulators to create a favorable framework for green investments. Montenegro’s geographical advantages, such as abundant sunlight, wind exposure, and access to the sea, position it well to harness renewable energy sources. Moreover, energy efficiency should not be overlooked as an area for significant savings. Improving energy efficiency is often more cost-effective than producing new energy, and this approach is promoted by the European Union.
The Central Bank of Montenegro sees its role as critical in promoting sustainable finance. It has taken the lead in developing a roadmap for the financial sector’s transition to sustainable finance. The CBCG’s role also includes creating a framework for managing climate change risks and facilitating the development of green financial products. Additionally, ongoing education and promotion of sustainable finance, along with the CBCG’s own transformation, will be essential to ensuring the success of this transition.
In the broader context of global sustainability, Montenegro’s commitment to becoming a truly ecological state presents a significant opportunity. While the country has not yet fully realized this vision, it is essential that future efforts focus on sustainable development. By positioning itself as a leader in the green transition, Montenegro can improve both its domestic environment and its global standing. The nation’s future development must be based on sustainability, and it must be embedded in future generations’ values to create a better quality of life for all.
For businesses looking to adapt to ESG standards, Gligorić recommends starting the transformation process early. Although ESG reporting is not yet mandatory, businesses should begin preparing by studying ESG frameworks and standards, such as the Global Reporting Initiative (GRI). By identifying relevant sustainability indicators and creating improvement plans, companies can position themselves for future success. Additionally, organizations that prioritize ESG principles will be more resilient in times of crisis and better able to attract investment.
Looking ahead to the next decade, ESG practices are expected to become the norm for businesses of all sizes. ESG scores will become a key factor in investment decisions and consumer choices. As society shifts towards these values, profit will no longer be the sole measure of success. The focus will be on helping communities, fair treatment of employees, good governance, and environmental stewardship—key pillars of sustainable development. Ultimately, this shift will benefit not only businesses but society at large, creating a healthier, more sustainable future for generations to come.
