Georgia: Strengthening ESG Disclosure and Transparency in the Banking Sector
Georgia introduced a standardized ESG disclosure framework to help banks report sustainability-related information in a consistent and comparable manner. Developed by the National Bank of Georgia (NBG) in partnership with the OECD, the framework aimed to improve market transparency, strengthen regulatory oversight, and support the development of sustainable finance in the country.
The Challenge
As sustainable finance gained momentum globally, Georgian banks faced growing expectations from regulators, investors, and development finance institutions to disclose ESG-related risks, opportunities, and sustainability practices. However, there was no standardized approach for ESG reporting, making information difficult to compare across institutions and limiting regulators’ ability to monitor sustainability-related risks and market developments.
Strategic Approach
In 2020, NBG introduced ESG Reporting and Disclosure Principles and a standardized reporting template as part of Georgia’s Sustainable Finance Roadmap. The Principles were linked to Georgia's Corporate Governance Code and the Basel III Pillar 3 disclosure framework and aligned with leading international disclosure frameworks, including TCFD and GRI, while also drawing on the IFC Disclosure and Transparency Toolkit. This helped integrate ESG considerations into broader governance, risk management, and disclosure practices.
A key feature of the framework was its materiality-based approach. Banks were expected to disclose ESG information most relevant to their business and stakeholders, including ESG-related risks, governance arrangements, policies, and risk management practices.
To support implementation, NBG provided a reporting template for commercial banks to submit ESG disclosures on an annual basis. Furthermore, NBG publishes the completed forms on its website each year to enhance transparency.
Building on this implementation experience and evolving international practices, NBG updated the ESG Disclosure Form in 2025. The revised template aligns with leading international standards, including IFRS S1 and S2, Basel guidance, TCFD, TNFD, ESRS, and GRI. It expands disclosures on governance, strategy, risk management, and climate-related risks, introduces additional sustainability-related indicators, and incorporates the principle of double materiality. The updated framework is scheduled to take effect for reporting beginning in 2026.
Outcomes and Impact
The ESG Reporting and Disclosure Principles established a common reporting framework for Georgia’s banking sector and helped banks strengthen ESG governance, data collection, and reporting processes.
By 2025, banks had completed ESG disclosures for five consecutive years, creating a valuable dataset on sustainability-related practices across the financial sector. NBG uses the disclosed information to prepare its annual Sustainable Finance Status Report, which monitors ESG-related risks, governance arrangements, sustainable finance activities, and risk management practices across the banking sector.
According to the 2025 Sustainable Finance Status Report, disclosures from 17 commercial banks indicate increasing integration of ESG considerations into banking operations, although the level of ESG integration varies across institutions. The framework has improved the availability and comparability of ESG information while providing regulators and market participants with greater visibility into sustainability-related developments across the banking sector.
Lessons Learned
Georgia’s experience demonstrates that standardized ESG disclosure guidance can help financial institutions build reporting capacity before more advanced sustainable finance requirements are introduced. By combining practical reporting templates with public disclosure, regulators can improve transparency and create a stronger foundation for sustainable finance market development.
The case also highlights the value of gradually enhancing disclosure frameworks as market capacity evolves. Starting with a practical reporting template and progressively aligning it with international standards enabled Georgia to strengthen regulatory oversight while preparing financial institutions for more sophisticated sustainability reporting requirements.
Key Documents /Links