On 25 November 2021, the National Bank of Ukraine (NBU) unveiled the Sustainable Finance Development Policy 2025 (“Policy”), developed in cooperation with the International Finance Corporation. The Policy, among other things, lists the tasks to be implemented in the Ukrainian financial services market in line with the best international practices and standards of environmental, social and governance (ESG) regulatory frameworks.

ESG-related initiatives to be implemented

The Policy envisages three main workstreams of the sustainable finance development reform that will impact financial institutions (FIs), as follows:

  • Enhancing corporate governance standards with due consideration of ESG factors
  • Introducing environmental and social risk management (ESRM) requirements
  • Establishing ESG-related disclosure standards for FIs

Implementation timeline

The roadmap drawn up by the NBU indicates that the ESG-related initiatives are to be implemented in accordance with the following timeline:

Action by the NBUTimeline for banksTimeline for nonbank FIs
Adopting legislative amendments to enhance corporate governance taking account of ESG considerationsQ1 2022Q3 2024
Developing ESRM guidelines to assist FIs in assessing environmental and social risksQ3 2022Q4 2024
Introducing ESG disclosure standardsQ4 2022Q4 2024
Recommending FIs to disclose technical (environmental) criteria for evaluating and selecting investment projectsQ4 2023Q4 2024
Developing recommendations on disclosing sustainability-related matters concerning the procedure for evaluating and selecting investment projectsQ4 2023Q4 2024
Introducing requirements for identifying and managing sustainable development risks into the prudential supervision systemQ4 2024Q4 2024 (insurance companies only)
Adopting legislative requirements on disclosing information on the sustainability of FIs’ activitiesQ4 2024Q4 2024

Related legislative initiatives in the FI sector

The above NBU initiative goes alongside the ongoing efforts of relevant stakeholders (including the National Securities and Stock Market Commission (NSSMC) and the State Agency on Energy Efficiency and Energy Saving of Ukraine) toward the elaboration of the legal ecosystem for the circulation of green bonds and the conduct of relevant disclosures by green bond issuers. In addition, the NSSMC will continue working on a set of recommendations on the principles of disclosure of ESG-related information and companies’ sustainable development to supplement the Code of Corporate Governance.


Stepanyda Badovska is an associate in the Kyiv office of Baker McKenzie, with over eight years of professional experience. She focuses on the banking and finance and energy sectors, and sustainable finance and ESG-related initiatives. She advises clients on cross-border transactions, including secured lending, debt capital markets projects, financial restructuring and project financing. Stepanyda also advised clients on regulatory issues such as financial institutions and payment systems activity, currency control and financial monitoring.