For us, sustainability trends and challenges are interpreted as business opportunities. We explore how to address and promote environmental conscious behaviour, social integration and other important questions through our business model, core activity and social networks. Therefore, along the line of climate change mitigation, our goal is to finance environmentally conscious improvements through our depositors exclusively, and prioritise renewable energy based developments, climate-friendly innovations and carbon neutral solutions.
Community financing of environmentally conscious solutions
Industry: Financial services
Date: Continuously since 2011
Solutions of the macro-sustainability challenges
Mitigation of climate change risks and flexible adaptation through effective monitoring, education and communication, and developing new technologies and business models
What´s the solution?
MagNet Hungarian Community Bank has revised and renewed its business model and core business philosophy regarding its role in society and economy, the pace and resources from which it intends to gain profit and re-invest into sustainable initiatives. We believe, as a company and bank we have limited opportunities. However, as a community bank we can expand our possibilities on a long-run by forming a community with our clients and partners. In regards to financial involvement and exclusion, we adhere to invest only in those projects and companies that have high level of sustainability prospect and operate on an ethical way. We include our depositors into decision-making and support their individual responsibility as well, thereby they can have a direct role in promoting climate-friendly energy use, improving energy efficiency or extending carbon neutral innovations on the market. Compared to our market-share, we have a much higher financial share in projects dealing with renewable energy, through which we support the establishment of Hungarian solar parks or for instance, the spread of electric cars. Our business model facilitates the reduction of current climate impacts, but also other environmental and social risks. Moreover, it strengthens adaptation to new challenges because we continuously shape our bank’s operation, strategy and aims throughout ongoing dialogue and cooperation with our clients and stakeholders.
Our business strategy is to presuppose and develop a value-based economy. We are convinced, that corporate responsibility is realised if it is embedded in the core activity. Moreover, high level of transparency is necessary, and social and environmental perspectives should be part of profit considerations, to be able to define ourselves as a sustainable and responsible company. All of these are followed by active social engagement which serves community development. We believe it is possible to be more profitable and stable by imposing strict sustainability and social perspectives, for which it is essential to train our clients, co-workers and partners continuously and strengthen cooperation. Our operational philosophy allows stable operation, and our social embeddedness provides a sort of social security net in case of crisis. Our activity is financially successful, the community bank is profitable, and the number of clients, total assets, and capital has been growing every year.
As a result of undertaking and encouraging value-based financing among our clients, all the invested 5 million forints worth deposits have generated additional economic and sustainability value on the field of corporate finance, based on data from the beginning of the year 2016. 14% was invested in environmental and nature conservation projects, the same percentage on cultural, educational and R&D projects, 18% on promoting and developing organic farming, and approximately 40% supported health- and social care. We intend to strengthen our clients’ role in society by allowing them to decide the community use of 1% of our profit within our Community Donation program. The level of active responsibility taking has been growing gradually and as a result, 185 million forints was distributed in the civil sector during the past 6 years, which supported 430 civil projects on a traceable and transparent way.