SUSTAINABLE BANKING ACTIVITY AS A SUBJECT OF REGULATION WITHIN THE DOMAIN OF FINANCIAL LAW

Abstract

In this article, the authors analyzed such a modern phenomenon as sustainable banking activity, which by its appearance in the world economic and legal arena reflects the reorientation of the financial sector to ensure the fulfillment of the goals of sustainable development, that is, the growing recognition of the role of finance in solving environmental, social and governance problems. As the authors note, sustainable banking goes beyond traditional financial goals due to the integration of social, environmental, and governance considerations, and that is why the provision of legal regulation of sustainable banking deserves special attention from researchers in the field of financial law. Analyzing the category of sustainable banking activity and the possibilities of financial and legal regulation of relevant legal relations, the authors draw attention to the definition and features of the concept of sustainable development, and also provide their own definition of the category “sustainable financing”. In this article, sustainable financing is proposed to be considered as legal relations regarding the provision of financial resources in various forms and with the help of various mechanisms to business entities, public authorities, and other entities that implement projects, programs, and individual initiatives aimed at achieving sustainable development goals. The authors also provide examples of the implementation of sustainable banking practices in terms of environmental, social, and governance components. Within the framework of this study, special attention is also paid to the Policy of the National Bank of Ukraine regarding the development of sustainable financing until 2025. Analyzing the current state of ensuring legal regulation of sustainable banking institutions, the authors conclude that currently, within the framework of Ukrainian legal realities, sustainable banking as a type of sustainable economic activity is not provided with either mandatory legal regulation or means of encouragement from the regulator to implement such practices. That is why, in the opinion of the authors of this study, it is necessary to create a regulatory framework adequate to modern realities for the regulation and promotion of sustainable banking activity based on the already developed declarative documents of the National Bank of Ukraine.