Thank you for standing by. I'm Costantino, your chorus call operator. Welcome, and thank you for joining the NLB Group Conference Call and Live Webcast to present and discuss creating better footprints, NLB Group Sustainability Report 2022. All participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Blaž Brodnjak, CEO, Ivan Tomić, General Manager, Strategy and Business Development, and Miss Alenka Rezelj Mercina, Head of Sustainability. Ladies and gentlemen, I will now read out today's agenda. Firstly, ESG landscape, expected trends in the next five years, and importance of the NLB Group.
Secondly, NLB Group sustainability strategy and journey towards net zero. Lastly, NLB Group 2022 key sustainability highlights and 2023 roadmap. With that, I would like to pass the floor to Mr. Brodnjak. Mr. Brodnjak, you may now proceed.
Thank you very much. Good afternoon, welcome everyone to our first webcast of this nature. Specifically giving attention and focus to the entire sustainability framework and landscape, while we have been, of course, breaching many or majority of boundaries of the planet as we speak. Amidst of the continuous fights of hegemons for who will actually prevail in this context, we have in NLB Group sincerely and truly and genuinely committed ourselves to really take these things very, very seriously and really start working intensively on what kind of footprints we actually do create. This is not only, of course, climate issues related, it is also societal issues related.
While of course we are promoting pacifism, while we are of course also promoting sustainable way of living, while we are promoting returning to the habits of our grandparents. We namely firmly believe that the key of sustainable turnaround actually lies in us simply returning to the ways of living a couple of generations ago, which means that we simply contain consumerism logic. We simply don't buy what we don't need. We don't throw food away, we consume locally produced seasonal one. Of course, we are faced with also framed, structured framework that is addressing this globally, and especially so and specifically so even more intensively in the later period within the European Union and European Monetary Union context.
There has been significant focus to this area of activities coming from European Commission, European Central Bank, many other bodies. Of course, there have been organized movements and organized institutions that have been dealing with this lately in a very determined way. NLB as the institution has by that obviously joined several movements of this nature, committing not only to Net-Zero Banking Alliance, also to UN Principles for Responsible Banking, also actually committing to the very ambitious plan by also obtaining external evaluations with the ESG rating and so on. On the other hand, this story, of course, will not end here. This is just the first step of the very long journey. We have committed ourselves to be away from fossil technologies as much as possible already years ago, especially when it comes to coal.
On the other hand, we really are fully determined to actually drive the whole region forward in this, on this path. We have been the first one of this nature meaning external evaluations with the ESG rating and so on. On the other hand, this story, of course, will not end here. This is just the first step of the very long journey. We have committed ourselves to be away from fossil technologies as much as possible already years ago, especially when it comes to coal. On the other hand, we really are fully determined to actually drive the whole region forward in this, on this path. We have been the first one of this nature from the financial institutions headquartered in this region.
This specific event today is actually signaling this role, this a bit pretentious role of us actually drafting the agenda for the others in this region, not only when it comes to, of course, the what we do on our own, but of course, what we do with our decisions impacting others. This is not limited clearly to the carbon footprint measurement. It is, of course, also directly influencing credit decisions from the financial institutions headquartered in this region.
This is not limited clearly to the car-carbon footprint measurement. It is, of course, also directly influencing credit decisions and by that, directly guiding the economy of the region in a certain direction. We can't do it alone, but we have been systemically important in six countries of the region. By that, of course, our decisions matter. They do matter to the extent that we believe can influence others to move also in this way. In the upcoming years, we expect even more strengthened framework when it comes to, of course, decisions, and by that, directly guiding the economy of the region in a certain direction. We can't do it alone, but we have been systemically important in six countries of the region, and by that, of course, our decisions matter.
They do matter to the extent that we believe can influence others to move also in this way. In the upcoming years, we expect even more strengthened framework when it comes to, of course, regulation, when it comes to formal expectations of various stakeholders, including, of course, very prominent ones in being investors. On the other hand, clearly, we are still, we have a long way to go still in proper capturing of data, in proper capturing of, you know, what we actually do cause with our behavior and our activities. If you hear the horns in the background and sirens in the background, potentially this is, for example, a protest of farmers today who have been now more or less, you know, confronted by a much more strict expected framework when it comes to the very prominent ones in being investors.
Clearly, we are still, we have a long way to go still in proper capturing of data, in proper capturing of, you know, what we actually do cause with our behavior and our activities. If you hear the horns in the background and sirens in the background, potentially this is, for example, a protest of farmers today who have been now more or less, you know, confronted by a much more strict expected framework when it comes to the use of phytopharmaceutical, you know, protection means.
Which means that, of course, when it comes to self-sufficient production of food, this will actually cause, you know, certain impact by them being forced to use more scientific methods, forcing them to, of course, be more innovative in how to produce food and, of course, forcing them, in many other directions, this will be a conflict. This will be a struggle. This is something we can anticipate. There will be a strong pullback from various parts of the society. We simply, you know, have to be strong enough as a collective, you know, way of working. Hegemons finally realizing that the only way forward is systemic thinking on a global level, that the only way forward is solidarity.
More developed countries actually, you know, provide certain framework to help less developed countries out while containing our own consumerism, while addressing our demographic trends, you know, in a sustainable way as well, while supporting meritocracy and, you know, key societal pillars, to include, you know, the handicapped ones to the extent that, of course, there is a kind of a balance in society. It's not only about democracy, it's about truly caring, you know, because there are various ways of democracy, obviously, in this world trying to be imposed on some others, you know, by, you know, us understanding there are limitations of these democracies as well in global context. My message is that in NLB Group, we are fully committed. We mean it truly and genuinely, and we are changing the ways we live, not as the business, but as individuals.
It is going to be a quite a hefty journey in front of us. You know, before we reach everyone's heart in our business, will take some time, but we want to go more forward. We want to go more far, farther than that. We want to reach hearts of, you know, every individual in this society, in this region, in the impact area of our business and operations. By that, my colleagues, Ivan and Alenka, will introduce what concretely we have been working on and what is coming. I will shortly wrap up then at the end after we will, of course, also give you a chance to raise any questions or, you know, any dilemmas you might have.
I pass by that the word to Ivan, whom I kindly ask to continue, and then Alenka will take over.
Thank you, Blaž. I'll start first a little bit on the footwork that's been happening in the background in the last 2 years. Talk a little bit about what have we done, what have we already achieved, and what we're planning to. On the achievement side, later on, Alenka will address it in more details. Here, let me first explain where did we place actually sustainability in our organization. Probably the best analogy is the Roman or a Greek temple entree. If you have that, probably have seen that strategy temple where you have the mission and vision on top that are supported by strategic pillars that stand on the foundation. Normally, foundation, you have the values. That's where we placed it.
Sustainability is part of the foundation of this company, so it transfers to the entire organization. It does touch upon every aspect of banking, every organizational unit. We have 1 small team that is coordinating all the efforts, and we are not, some other banks opted for creating a bank within a sustainable bank within a bank. We didn't go for that option. We went for very small central team that cooperates heavily with the colleagues all around the bank. I'll start here. How did we start? I'll take it counterclockwise. First, we... On the previous page, I'm still on page 6.
Basically here, we first defined, okay, eight stakeholder groups, and we took a look, okay, what these stakeholder groups need from us, what are their needs, I mean, us as well as employees, what investor needs, and then we mapped that to sustainability. One example could be, is it risk management? Is it profiting from early trends? Is it Employer of choice, is it the reputation? We realized that we need to put those and actually colleagues from it, put a high team number of policies and procedures that are the foundation of the risk management so that we are able to scan environmental and social risk, that we avoid the adverse one that we promote, actually the positive ones.
It was very natural that we undersigned the Principles for Responsible Banking, and that we align our business model to all six. Last year, we have undersigned the Net-Zero Banking Alliance. We started working on that this year, that will define basically which exactly sectors we will be promoting and, as one of the key roles of any systemic financial institution. Our role is to support growth, but we want to support growth in sustainable sectors. We want to be transparent with everyone. We want actually other institutions, be it financial or not, to follow the way.
That's why we want to play it as transparent as possible, so that we also inspire others in our region to follow sustainability movement, because we do believe that sustainability is a force for good, for our region and for other regions in the world. How did we actually slice and dice this sustainability mountain? First, we put our group sustainability framework, basically that lays down the foundation, how do we approach sustainability and what do we exactly do. I will then move to the next page with the timeline. I would say that from 2020 and 2021, the beginning was the year of the footwork.
Maybe the most important is that we joined UNEP FI, we approved the sustainability program and we put, basically we rolled up our sleeves to address different elements of sustainability. In 2021, we did develop the framework with the three pillars, which we will see on the next page. We implemented the ESMS procedure in the bank, we issued our sustainability report that for the first time actually transparently showed to us internally and external public what is our operational carbon footprint. As well, we went through the UN PRB exercise to align our business model. In 2022, there are three main milestones.
We achieved 46% reduction in our carbon footprint, so we went from 4 ton to 2 ton, which was quite remarkable within 1 year. We also received a rating from Sustainalytics that placed us in top 15 banks that have been rated. We joined the Net-Zero Banking Alliance. Moving on to the next page. Just briefly here, wanted to show how do we approach sustainability in our bank. There are 3 main pillars. One is sustainable operations, second, sustainable finance, and then third one is contribution to society. Within sustainable operations, this basically addresses what do we do internally as an organization. It doesn't matter what type of organization.
That our environmental and social footprint is improving, that we do measure our impacts, that we have responsible procurement, that ATAR aspects are catered for. This is a quite large. It's a program within a program that has several roadmaps on its own. Moving to sustainable finance. That one is obviously key for future, where we will be defining our targets within specific sectors. We will of course measure our carbon footprint when it comes to the financed emissions, and we will be tackling each sector by sector, and we will be placing targets for especially high intensity sectors.
The last and third component, we singled out actually from sustainable operations contribution to society, because this part actually defines our sponsorships and donations that we are aligning with UN SDGs. Moving on, I would go to the next page. I already mentioned there is no need to go deeper, that we are fully aligned with the six principles of PRBs. Even if you take a look, this meeting is part of principle four and principle six, where we want to be transparent to all stakeholders and, as I said, inspire other organizations to follow the way. If I would single out one, obviously is the impact and target setting. We did in 2021, set some of the targets.
We can see them actually directly on the next page. I think it's page 9. Yeah. We put here three areas. These are the targets we put in the first year. First area, climate. Second, resource efficiency. Third, inclusion and healthy economies. On the financing side, we put EUR 785 million new production only for corporate for the first time. We are marching fairly decent over our targets. We already have almost EUR 170 million pipeline fulfilled. There are new projects that did happen, but they are recorded only when the money is dispersed to the clients. We'll be looking at expanding this target once we complete the net zero banking strategy towards the end of this year. Moving on to the next one. For...
By 2030 actually, we agreed that we will actually use 75% of all energy actually coming from renewable sources. Last year, we managed to bring the target to 70%, and there are two main reasons, is that in Slovenia and in Serbia, we do procure 100% carbon free actually electricity. Then going on with the resource efficiency, the target of 50% paperless, 50% reduction from the baseline 2019, which was the year before COVID. We are not that far away. We are already at 43% of the 50.
The last target from the UN PRBs is that we set our target on the digital penetration to be at 55%. We are at just north of 40%, and it's moving towards the direction we do set. Here we are a little bit limited and dependent, of course, on the market. Our markets are not not the most, but not the least digital on the planet. We are setting a full program of incentives for people across all age groups to onboard, to get them onboarded to digital accounts. Let's move on here. I already mentioned that we obtained the first rating last year. Bear in mind that this rating is based on 2021 deliverables.
We do expect actually, improvement in the rating just because there are 2022 deliverables not factored in. One of them, I already mentioned, -46% of operational carbon footprint, will be addressed in the next year rating. I'll just finish off with the next page on the journey towards net zero. We did commit that by 2030, we will halve our emissions, financed emissions, and by 2050, we will be aligned to net zero goal. First, we started actually this year, this challenging exercise that has several phases, and we are in the first phase right now. We are measuring our emissions across different portfolios. I mean, mostly being corporate, retail, and sovereigns.
That's in the plan for this year from the strategy itself. With that, I will pass to Alenka.
Thank you very much, Ivan, and good afternoon, everybody. Now I will provide some hopefully interesting insights with regards to sustainability agenda. We will touch upon 2022 key sustainability highlights, and then we will conclude this presentation with the roadmap for this year. Since we only have, let's say 25 minutes left, I believe that I won't go into each and every detail. I would like to emphasize here that this presentation will be available for you on our webpage, nlb.si. You are kindly invited to download it and look through it again after this webcast.
The year 2022 was for sure quite turbulent, not only on the level of European regulatory framework with regards to sustainability, but it was also very turbulent for our ESG agenda for sure. In this region, a lot of crucial things actually happened in the year 2022, which pushed our institution, our bank, into ESG direction as well. As my colleagues mentioned, we decided to join a second initiative, Net-Zero Banking Alliance. This actually meant the start of development of comprehensive NLB Group Net-Zero business strategy, which will show the results by the end of 2023. This is everything in line with the NZBA roadmap that is that we committed to.
Hopefully our next sustainability report will focus very much on Category 15 financed emissions together with clear portfolios decarbonization targets. We believe that this will be another interesting next step for our bank. Now I will try to focus a little bit more on numerical aspect of sustainability. 'Cause obviously we have some numbers, but on the other hand, we struggle with some ESG data very much, which I believe is the same as all other financial institutions throughout Europe. Our carbon footprint measurement was prepared for the year 2022. We lowered our operational carbon footprint. I have to emphasize here operational carbon footprint. Financed emissions were not measured for the year 2022.
We lowered it for 46% compared to the year 2021. 70% of our electricity comes from zero carbon energy source. This of course, added very much to good carbon footprint results. With regards to us, in ESG, we again received Top Employer award. This happened eight year in the row. Top Employer award is as provided by a Dutch institute, and it's a very important international award, we're very proud. Next, next important thing also was development of comprehensive human rights policy. I would like to point out that at the beginning of 2023, our bank also joined National Action Plan for Respect for Human Rights in the Economy.
This is Slovenian Action Plan for Respect of Human Rights in the Economy. Together, I mean, we have 3 years now to establish full system to monitor and to report on Human Rights status and situation in our bank. We also appointed a Human Rights custodian in our bank, policy was also implemented in all of our members throughout the group. To raise awareness, we organized first time of the group Sustainability Day. It was devoted to ESG elements, to ESG importance, to achieve better understanding of different parts of the bank, how crucial for our future work sustainability is.
For the year 2023, we plan to prepare our second sustainability day for everybody, so for our all employees in our group. With regards to G, so governance, we were very much active in our sustainability committee. There were 5 sessions held. We tackled more than 22 topics. A lot of action plans were developed based on discussions at sustainability committee, where the whole management board is present and all. Pillar, which was already mentioned, there was EUR 167 million of sustainable corporate financing done in the previous year, and EUR 53 million of green loans granted to private individuals. We developed a decent range of different sustainability related products that are available to take from shelf, I would say.
We also developed a webpage where our clients can see our offer. We are active in EBRD program, Women in Business in Montenegro, where there is a very good, I would say environment to enhance women in business. Of course, we're not only careful about opportunities, but we are very much aware of risks related to ESG. As you may know, ECB, NLB is ECB related entity, and that's why we are enhancing our ESG risk management and climate risk management with continuation of the implementation of ESG factors in lending process.
We also developed environmental and social management system and to tackle ESG risk management challenges, but I will say a little bit more later on. Regarding contribution to society, I would like to emphasize here that in the year 2022, the Frame of Help project was executed for the third time, so on the group level. This time we addressed companies in the region that prioritize sustainable IT solutions. Altogether, 300 companies in the region participated, and the best project was awarded with the price of EUR 50,000. Second place project, EUR 30,000 and so on. We were quite intense with this project.
In the year 2022, also a special inclusive charity project was carried out in the festive season, when we donated more than EUR 500,000 to humanitarian institutions. If we move on, this is our corporate sustainability governance scheme. As you may see, it became quite comprehensive. The group implemented this governance framework top-down and bottom-up. We wanted to make sure that all bodies, competence lines, and organizational units included the sustainability in ESG considerations in their respective work area and responsibilities. Governance is also a focal point of our sustainability report for the year 2022. You're invited to take a look. With governance, of course, remuneration is very much related.
In the year 2022, part of the variable part of the salary of NLB Group's management boards members was subject to performance assessment against goals in five key areas, namely sustainability, corporate governance, ESG risk management, transition and sustainability financing opportunities, operational and environmental impact, and contribution to society. Weights were different for each member, of course, but the range spans from 5%-20%. Regarding our operational carbon footprint, actually, a lot was already said. Once again, the most important thing is that we lowered our Scope 1 to 3 carbon footprint from 4 tons of CO2 per employee to 2.36 tons per employee from the year 2021 to the year 2022.
That we actually, as you will see further on, we integrated quite a lot of key energy efficiency measures. Maybe I will just quickly run through those that were implemented in the year 2022. We invested in branch renovation. We reduced actually ventilation and heating schedules, and increased the waste air recovery percentage. We turned off night lighting where this was possible to do. We are constantly raising employee awareness regarding energy efficiency. Heating and cooling were much reduced.
There were already a lot of measures done, but we plan also quite a lot of measures for the next years, such as installation of solar power plants, divestment of owned areas, reduced heating, ventilation, and cooling business, work for chrome skins, and reconstruction and refurbishment of different office buildings. In the area of risk management, as I said, our bank is ECB-regulated entity. ESG risks do not represent a new risk category, but rather one of risk drivers of the existing types of risks. The management of ESG risks follows ECB and EBA guidelines with tendency of their comprehensive integration into all relevant processes. The group conducts materiality assessments, which is part of overall risk identification process.
We do this to determine the level of transitional and physical risk to which the group is exposed. It was realized that transition risk is much more material compared to the physical risk. We also expect that with the implementation of net-zero strategy, that its impact will gradually diminish. Based on industry segmentation of portfolio and corresponding emissions, the group has actually a relatively low exposure to emission-intensive sectors. Again, much more about our risk management framework as is available in our sustainability report for the year 2022. To measure ESG components within our loan origination and monitoring process, we embedded environmental and social management system.
Actually, a big push to develop this system was our business partnership program with EBRD and MIGA. We actually implemented their environmental and social requirements and developed quite an extensive environmental and social management system. This system, it starts with the exclusion list. If I now jump to our exclusion list, which is quite extensive, here, I would like to say that NLB Group actually is committed not to provide any new financing to thermal coal mining or coal-fired electricity generation capacity in any way, including eventual transitional enhancements. This exclusion list, as I said, is fully aligned with EBRD and MIGA as to a very important international financial institution with regards to sustainability.
For sure, this exclusion list will be developed in future years as well. Here I would like to touch upon our sustainable product portfolio. There were quite some new products for legal entities developed in the year 2022. Actually, we offered 3 new green loans for legal entities, NLB Green Partner Loan to finance the construction of turnkey solar power plants, NLB Green Loan for investments in the energy efficiency of business buildings, and then NLB Green Loan for reducing the carbon footprints that cover the area of energy efficiency, circular economy and sustainable agriculture. For your information, I would like to add here that for SMEs, we provide lower interest rate on green loans.
This interest rate is about 45 basis points to 160 basis points lower than our, I would say, ordinary offer. There's no credit approval costs related to this offer. With regards to private individuals, interest rate is lower for about 50 basis points, we also offer EUR 100 lower credit approval costs. There is quite an appealing offer as well. Our people, very important slide. Almost last, definitely not least. Very much, this is why there is a lot of text here, because we really want to say a lot about this things about employee wellbeing.
We're very much aware that employee wellbeing will be a focal point of next 5 years with regards to sustainability. I would like to emphasize here that NLB Group is complying with I dare say all ILO standards, local legislation, collective agreements and policies. That's why we actually have a minimum of grievances and basically no lawsuits with regards to labor practices. We also developed quite some initiatives to improve the organizational culture. We are very much trying to develop constructive behavior styles. The values that are our indicators for the future are growing people, encourage entrepreneurship and encouraging people. With regards to employee health and safety, we very intensively promote healthy habits.
We provide safe and healthy jobs to our employees throughout the group. We implement the joint measures, like regular trainings with the risk assessment of individual groups of workplaces, and measures to reduce the dangers that may occur in a different workspace. In the year 2022, 36% of employees worked from home for better work-life balance. Actually, our bank continuously enables employees to work from home. Of course, those employees whose presence is not essential to the business process. Regarding diversity and inclusion and gender pay gap, I would like to say that in the year 2022, the policy on the provision of diversity was developed, and most of the targets, 2022 targets were already met.
This policy on provision of diversity is developed for the level of management body and senior management of NLB d.d. Regarding gender pay gap, we realized that there is a slight gender pay gap, which is very much in line with average Slovenian gender pay gap in a Slovenian economy. The main reason we believe for the gender pay gap in our institution is in higher proportion of men on better paid positions and in higher proportion of women in lower paid positions compared to overall gender structure in bank. However, we introduced many initiatives to close the gap, and above all, to raise awareness among employees to reduce the presence of unconscious bias. Employee engagement was pretty good.
Actually, last year, employee engagement in NLB Group has been measured, and the survey was completed by 73% of all employees, which is estimated to be above average. We have 44% of people that are engaged, 39 that are not engaged, and 70% of actively disengaged employees. To wrap up our sustainability roadmap, here I would actually like to mention only four things. I believe that the most important will be employee well-being, which we already mentioned a couple of times. Employees are super important for our agenda, for our sustainability agenda. The next thing that will be very much important in this year is our carbon footprint.
We will measure finance emissions Category 15, and we will of course disclose our baseline with regards to finance emissions. We will further develop and implement our net zero business strategy with decarbonization targets. This will for sure stay our focal point. We are very much aware that we will have to work with clients with regards to carbon footprint, to get appropriate ESG data, and to work on firm transition strategies so that we can move all and everybody move into the same direction, which is zero carbon for sure. We will be very focused on sustainable business opportunities and ESG risk management in line with our supervisors' expectations and of course in line with all regulatory requirements.
I believe that that would be all from my side. Oh, we have a really good timing, I see. Thank you very much. I would like to invite you now, if you have any questions, please, floor is yours.
Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, you may press star and two. Those participating via the webcast, you may type your questions via the live feedback box below the presentation. For those participating in the questions and answer session, please use your handset when asking your question for better quality. Anyone who has a question may press star one at this time. One moment for the first question, please. As a reminder, if you would like to ask a question, please press star one on your telephone. Once again, to register for a question, please press star one on your telephone or type the questions in the box.
Ladies and gentlemen, we will now move to our webcast questions. The first webcast question comes from Maya from Slovenia, and I quote, "How do you prepare on upcoming CSRD directive and ESRS standards?" Alenka, will you answer?
Yeah, I'm happy to answer this question. Regarding CSRD and of course CS3D, which will be even more demanding, we prepare actually quite intensely. I must say that we are very active in Slovenian Banking Association and in European Banking Federation, and in different partnerships. With the aim to get as much information as possible and to prepare our bank for this reporting step. We are well aware that we will have to implement all of the ESRS standards, that our sustainability report will have to be verified. We are also discussing already with different verification agencies, how to do it and how to become partners in this next step. We are well aware that a lot of new data will have to be disclosed.
We're also aware that we will have to prepare sustainability reporting in a little bit different format so that it is machine readable. We are also looking forward on new information from a European Commission with regards to environment, European Single Access Point. We're really looking forward to common standards, sustainability standards, so that all of the banks can be, you know, put on the same denominator and report with regards to same KPI, so that we can be properly so that we can compare each other and that we can really see what our peers are doing and how do we compare with our competitors.
CSRD for sure will be a big step. We have already provided. Actually, we made an analysis of ESRS standards and a decent gap analysis. We believe that a GRI standards that we already address are to a certain extent aligned with ESRS, so it will make our future reports a little bit easier. Of course, the most important thing is just to stay on top of this agenda. We believe that since we are very well placed in different partnerships, that we will get all information needed to actually implement ESRS.
One thing has to be mentioned, though. One, of course, quality of approach and accessibility is Slovenia, and of course we are also operating in five other countries. What we are talking about is more or less Slovenia. We do have challenges when it comes, of course, data gathering, you know, and some other, you know, common approaches when it comes to the entire operation, the entire region, right? This is our, you know, focus to come. How actually to integrate the whole region in this very ambitious agenda, especially when we look at, you know, what is the production mix of electricity, what level of actually, you know, the energy efficiency, we can be talking about when it comes to, of course, consumption of energy and so on.
It is of course a tedious challenge and a tedious journey, but we are fully committed to come to the common denominator also when it comes to our group perimetry, right. It's on one side Slovenia with, you know, maybe better insights and standard of gathering certain information. What we need is full commitment of the entire society, including governmental bodies. This is, you know, something that, you know, is lacking, I guess, a sufficient attention. Central registries, depositories, repositories of information and so on, you know, energy IDs and so on. This is something that of course still needs to come in a proper way so that it's easily accessible.
We are the driving force when it comes to the Bank Association, to somehow standardize and, you know, and then put to the common denominator any reporting needs for the companies and, you know, what has to be in principle, submitted, to make also lives of companies easier. If you have 15 banks approaching them and they have to, of course, you know, fill in 15 forms, this is of course not something that's highly effective and efficient. It has to be, of course, become a movement of just about everyone, not only the banks.
The next webcast question comes from Mojca from Slovenia. I quote, "How do you support, raise awareness and engagement of NLB Group clients in terms of sustainability?
That's a pretty broad question. NLB has been more or less active in all past possible dimensions. You know, allying, partnering with, you know, institutions that are dealing with this is the core ambition and core initiative. Has been attending conferences. Has been organizing our own events. Have, you know, Alenka was mentioning sustainability today, which is internal, but we have been active externally, really, really very actively in last years. We will simply continue to be even more active in this way. Simply organizing today's event is a step in this direction. We want to incentivize everyone to start being transparent, fully want, you know, when it comes to this entire universe of many activities and key pillars of the entire sustainability and ESG element. We claim...
I personally believe we have been amongst the pioneers of the region when it comes to that. Of course, this doesn't stop with the communication and information. This is more or less something that you see from the outside, but it's of course, continues with many, many activities, just a part of which actually Alenka presented today. There is much more and it's only present, basically. We, as I said at the beginning, need to make sure that we touch everyone's heart among our employees and, you know, in longer term, also among our clients and all other stakeholders. I'm provoking usually, first, we need to stop shooting at each other and, you know, sending weapons all over the world.
Second, we simply start changing our lives dramatically, which means we don't speed at highways, we simply eat local seasonally produced food, and we don't consume for anything we don't really need. As long as we are not prepared to do that, the world will not change.
The next webcast question comes from Vesna, from Koroška . I quote, "What do you see as the biggest challenges in reaching net zero business target by 2050?
I personally, I mean, Alenka Recelj Mercina and Ivan Tomić will for sure add something. I personally believe it's consistency and determination that is not yet there. You know, there are inconsistent messages. There is a lot of hypocrisy. You know, there is a lot of, you know, moves and decisions that are, in my eyes, problematic. You know, if you on one side claim you wanna get net zero emission neutral, and you burn more coal than ever in history and you're above 2019 level, something is wrong. Something is seriously wrong, right? It's not only because of the wars, it's because of the general, you know, general global collective commitment. Is it there or not? Are we looking at systemic thinking or are we looking at, you know, still hegemons fighting for who's going to prevail?
That's the biggest challenge if you ask me. Hegemons need to understand that it's about the entire planet, not the interest of one particular party to prevail. Ivan, go ahead.
Yeah. I will add it, that there are some challenges. I would say number one challenge for us, as NLB Group is actually to get transparency on the data, because we operate different regions where clients do not have.
All the data necessary for us to calculate our carbon exposures. That's internal. The external one is actually the regulation itself. We see that regulators are changing the way they calculate carbon emissions. Some countries, ministers of energy consider certain sectors highly carbon intensive, some not. We see that in the next 26 years, and we can foresee that the regulation will change. I mean, take a look, nuclear, take a look at some other industries. We will set our targets obviously by the end of this year. I do see that regulatory change might affect our plan. There, we don't have an option. We have to comply to regulations that is set on the government level.
It is about real systemic is-investment, right? Forced electrification without the upgrade of the grid is just a sand in the eyes, you know. You want to, you know, install PVs all over the country, but the grid doesn't take it, you know. The storage capacity is not yet available to the sufficient extent and so on. Messaging needs to be consistent, and it's not necessarily consistent at this point of time, and not necessarily enough investment is actually rooted and directed towards enabling the green transition. It's not. One thing is what is talking about that, and second is you shut down the coal power plant, but what is the alternative? You know, who is going to invest in the alternative? Is it happening? Is the grid ready to take it, and so on.
It is a lot of words, but insufficient action in various countries, including Slovenia.
Maybe one more just from my side. I will say that in this region, we might be lucky. As a bank, we are not financing one of the dirtiest industries on this planet. Let's say there are no palm oil traders in this region. The deforestation is not that high. On that systemic level, we might have a little bit easier job than our, let's say, peers in other parts on this planet.
The biggest challenge will be air pollution in principle, which is based on, you know, insufficient centralized heating systems in the cities of the region. Still a strong thermal production on coal. This switch is needed. We see countries investing. We see significant investment in Serbia, Kosovo, you know, Croatia. A lot of wind parks, a lot of larger solar plants are, you know, in the pipelines. We finance those. We want to be a part of this transition by simply promoting positively and supporting with finance, energy efficiency and renewable production projects, while withdrawing support to any coal related technologies. We have not been financing for years even any enhancements when it comes to the, you know, coal technology. I mean, this is fact.
We are trying to assist this way, it's a challenge, you know. Still a mixed production. Mix in the countries is still, you know, not very favorable. Slovenia is one-third nuclear, one-third hydro, and one-third thermal, basically. Once we shut down the only real power, you know, sizable thermal. We will be more or less fully renewable. It's just not yet clear what is this renewable source is going to be.
Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Blaž Brodnjak for any closing comments. Thank you.
I would just like to thank everyone for hanging in there. It was our first one, provide a feedback to us, please. What do you wanna hear from us? How you want actually us to conduct that to be more effective maybe in messaging. We kindly invite everyone simply to onboard this journey. I mean, we live in a specific part of the world with our own challenges, but overall, there is really full commitment of our team. NLB has been a pioneer and will, you know, be even more vocal, even more active when it comes to advocating these topics. We're moving in this direction, with our internal impact and of course, external impact.
We have been one of the pillars actually of, you know, also CSR in this region, basically, supporting many cultural, sports, you know, humanitarian initiatives, and we will do even more. The more we will be successful, the more we will support these pillars of the sustainable development as well. We are firm believers into meritocracy and clear corporate governance. There have been challenges in this respect. We will be loud and vocal about that as well. Until the next such occasion, stay healthy, consume local and seasonally produced food, and don't buy anything you don't really need. Thank you very much.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.